Thursday, September 15, 2011
Monday, September 12, 2011
No Down Payment? You Can Still Buy A Home
Many potential homeowners look at their bank account and figure “there’s no possible way I can buy a home”; however there are many programs that offer down payment and closing cost assistance that potential homeowners are unaware of. This is one reason it can pay off if you take the time to contact a realtor and a mortgage loan officer to see what you qualify for.
First Time Homebuyers have the best opportunities available now –down payment assistance to buy a home complimented by an abundance of available homes and low mortgage interest rates.
And what happens to those that wait?
Assistance to purchase a home will dry up because its only on a first come first serve basis; interest rates will go up and the price of homes will increase. Take a glance at all the programs available to help you with down payments and closing costs;
Workforce Initiative Subsidy for Homeownership (WISH)
The WISH program provides a three-to-one match to down payment funds a homebuyer deposits towards the purchase of a home, up to $15,000; so for every $1 you save up the WISH program will match it with $3
To be eligible for WISH funds, the homebuyer must meet the following eligibility criteria:
• You must enroll in the WISH Program
• You must successfully have completed a homebuyer counseling program
• You have to be a first-time homebuyer, as defined by the member
• You must meet income eligibility guidelines that are at or below 80% of the HUD area median income
• You must open escrow on a home purchase transaction within one year of enrollment in the WISH Program
US Dept of Housing & Urban Development Homeownership Vouchers (HUD Homeowership)
If you qualify for and obtain a Section 8 Housing Choice Voucher, you can use the HUD subsidy to purchase a home via the Homeownership Voucher Program.
• Contact your local public housing agency to apply for the Section 8 program. The Section 8 program provides rental subsidies, known as Housing Choice Vouchers, to households that earn significantly less than their area's median income
• You cannot earn more than 50 percent of your area's median income
• You must get on a waiting list, assuming it is open in the area where you wish to live
• Use your voucher to buy a home
Those are only two popular down payments and closing costs assistance programs but there are many state, local and county programs available to a wide range of potential homebuyers, all with varied income guidelines.
And don’t think for a moment the only grant programs available are for low-income individuals because there are programs that are based on revitalization areas and do not look at your income.
You may qualify for a grant based solely on your employment such as the Good Neighbor Next Door program. It all starts with contacting a real estate agent and a mortgage loan officer.
Tuesday, September 6, 2011
Pitfalls To Avoid In Commercial Real Estate
As wonderful and constant as commercial real estate is, there are some major pitfalls that can completely ruin the interest, investment and return on a property. Besides inaccurate assessments and risks that are beyond your comfort zone, the only real reason these pitfalls occur is because of the lack of due diligence that you perform. By not investigating deeply enough, not overturning every rock, and rushing into what seems like an awesome deal, you can experience some horrible events that can literally cost you hundreds and thousands of dollars.
These are setbacks I hope you never experience by asking every question, verifying everything, and assuming nothing.
Below you will find some unfortunate and common mistakes that can occur if you are not completely on your game.
Some of the major pitfalls in commercial real estate are related to the zoning and use of a property. Brokers may offer information that is not accurate about the rezoning and use capabilities of a property. Although many of the people in this business are honest and have integrity, you can bet you will run across a few brokers or agents that will do and say almost anything to sell a property.
Some problems that arise may include not checking with the city planning and zoning decision makers to see if a property can and will be able to be rezoned to the zoning that is expected. Also, just because the zoning may include your use, you must check with the city to make sure there are no special contingencies regarding use.
The last thing you want is to have a property you believe can be re-zoned to a higher and more profitable use, and after you purchase it, realize you cannot do what you intended! This can mean a less of a return on investment, or a complete loss of an investment. Believe me, situations can get very bad regarding the rezoning and use of a property, and fighting with the city will take more money, energy and time than it is often worth.
Another pitfall that can arise is purchasing a building that is leased, and then losing tenants due to leases or rental agreements being up! It is important to see and verify the leases of a building to make sure you will have some income to cover the debt service while you change, renovate, or do whatever it is you are going to do with the property. Verify you will have tenants when you purchase the property; otherwise, you may not have enough income, and this can leave you in the red.
It must be acknowledged that every property and situation can differ greatly from another. Because of this, there can be many different ways that a property can go. For this reason, all “what ifs” must be addressed, as well as exit strategies created for every scenario. When you limit yourself on exit strategies, you increase your possibility for failure.
With every property you must ask yourself, “What is the worse that can happen?” Weigh the risks and the probability of the worst happening, and either plan an exit strategy for this possibility, or don't move forward. You must look at everything from the worst to best case scenario, and have an exit strategy for each. Not only will you be prepared for anything that comes your way, but you will have less of a chance of really getting buried and losing money on an investment gone badly.
In commercial real estate, I often see a person trying to save a few thousand dollars that ends up costing him or her hundreds of thousands, just because they try to play hard ball with negotiations. It is always important to know what you are willing, and not willing to do when you go into negotiations regarding the purchase or selling of a property, as well as leasing and rental agreements.
For example, asking for $35.00 per square foot and being offered $30.00 per square foot, (reasonable in this situation), and assuming the interested party is very motivated about the space, and coming back with $33.00 a square foot and nothing less, my cause the loss of the three year leasing agreement, and the income for another two months from the property because it is not leased out is definitely not worth it!
Take the $30.00 per square foot; get the property leased up, and make an agreement that the rate will increase two or three dollars every year after. Don't lose the tenant because you want to play hard ball in negotiations when, really, you can make it work!
As you become more educated and get closer to reaching your goal of being a real estate insider, you may want to branch out into new markets and expand your comfort zone. This is great. However, you must realize there are many differences between various types of properties. Doing a deal with a 120 unit apartment complex is different than a 55,000 square foot office building.
When moving into different markets, items can easily be overlooked, and major problems can arise, simply because you are not aware of them. It is often a good idea to partner with someone already in that new market so that you may have the benefit of experience and know-how on your side. Learn form this venture so you will be more familiar with the market, property, and how it should be addressed. It is easy to get in over your head with new markets that can lead to major and expensive problems.
As you continue on your adventure in commercial real estate, be sure to do all your homework regarding a property. You will be less likely to run into problems, or better yet, be prepared to fix the problems if financially worth it. Never assume everything is as it appears, because, more often than not, it isn't! You must play smart in this game, or you can lose everything. Use you resources to get the best and most accurate information and you can avoid these pitfalls in commercial real estate.
These are setbacks I hope you never experience by asking every question, verifying everything, and assuming nothing.
Below you will find some unfortunate and common mistakes that can occur if you are not completely on your game.
Some of the major pitfalls in commercial real estate are related to the zoning and use of a property. Brokers may offer information that is not accurate about the rezoning and use capabilities of a property. Although many of the people in this business are honest and have integrity, you can bet you will run across a few brokers or agents that will do and say almost anything to sell a property.
Some problems that arise may include not checking with the city planning and zoning decision makers to see if a property can and will be able to be rezoned to the zoning that is expected. Also, just because the zoning may include your use, you must check with the city to make sure there are no special contingencies regarding use.
The last thing you want is to have a property you believe can be re-zoned to a higher and more profitable use, and after you purchase it, realize you cannot do what you intended! This can mean a less of a return on investment, or a complete loss of an investment. Believe me, situations can get very bad regarding the rezoning and use of a property, and fighting with the city will take more money, energy and time than it is often worth.
Another pitfall that can arise is purchasing a building that is leased, and then losing tenants due to leases or rental agreements being up! It is important to see and verify the leases of a building to make sure you will have some income to cover the debt service while you change, renovate, or do whatever it is you are going to do with the property. Verify you will have tenants when you purchase the property; otherwise, you may not have enough income, and this can leave you in the red.
It must be acknowledged that every property and situation can differ greatly from another. Because of this, there can be many different ways that a property can go. For this reason, all “what ifs” must be addressed, as well as exit strategies created for every scenario. When you limit yourself on exit strategies, you increase your possibility for failure.
With every property you must ask yourself, “What is the worse that can happen?” Weigh the risks and the probability of the worst happening, and either plan an exit strategy for this possibility, or don't move forward. You must look at everything from the worst to best case scenario, and have an exit strategy for each. Not only will you be prepared for anything that comes your way, but you will have less of a chance of really getting buried and losing money on an investment gone badly.
In commercial real estate, I often see a person trying to save a few thousand dollars that ends up costing him or her hundreds of thousands, just because they try to play hard ball with negotiations. It is always important to know what you are willing, and not willing to do when you go into negotiations regarding the purchase or selling of a property, as well as leasing and rental agreements.
For example, asking for $35.00 per square foot and being offered $30.00 per square foot, (reasonable in this situation), and assuming the interested party is very motivated about the space, and coming back with $33.00 a square foot and nothing less, my cause the loss of the three year leasing agreement, and the income for another two months from the property because it is not leased out is definitely not worth it!
Take the $30.00 per square foot; get the property leased up, and make an agreement that the rate will increase two or three dollars every year after. Don't lose the tenant because you want to play hard ball in negotiations when, really, you can make it work!
As you become more educated and get closer to reaching your goal of being a real estate insider, you may want to branch out into new markets and expand your comfort zone. This is great. However, you must realize there are many differences between various types of properties. Doing a deal with a 120 unit apartment complex is different than a 55,000 square foot office building.
When moving into different markets, items can easily be overlooked, and major problems can arise, simply because you are not aware of them. It is often a good idea to partner with someone already in that new market so that you may have the benefit of experience and know-how on your side. Learn form this venture so you will be more familiar with the market, property, and how it should be addressed. It is easy to get in over your head with new markets that can lead to major and expensive problems.
As you continue on your adventure in commercial real estate, be sure to do all your homework regarding a property. You will be less likely to run into problems, or better yet, be prepared to fix the problems if financially worth it. Never assume everything is as it appears, because, more often than not, it isn't! You must play smart in this game, or you can lose everything. Use you resources to get the best and most accurate information and you can avoid these pitfalls in commercial real estate.
Saturday, September 3, 2011
Master-Planned Communities For Active Adults-Not Your Typical Subdivision Anymore
Retirement living is changing drastically – these days you're more likely to see residents zooming by on motorized golf carts and jogging that 3rd mile, than chugging along in a push wheelchair. This is not your grandmother’s retirement community.
Many of these master planned retirement communities are age-restricted and often located near metropolitan areas or nearby suburbs. The minimum age is typically 55, with one member of the household qualifying. Some communities restrict ownership to those who are age 62 and older, and all occupants must be at least 62. Many are gated and private.
Living in Style - Amenities
How do you know if you're in a Master-Planned Community or simply a typical subdivision? Generally, they are distinguished by the tremendous number of amenities and conveniences;
• Club House
• 18-Hole Golf Courses
• Libraries
• Fitness Centers
• Swimming Pools and Spas
• Arts & Crafts Centers
• Billiards and Card Rooms
• Tennis Courts
• Basketball Courts
• Continuing Education Classrooms
• Hiking & Biking Trails
• High-Tech Media Centers
• Banquet and Ballrooms
The list is endless; it’s like an on-going vacation that never ends.
So why would you move out of a perfectly comfortable home that has served you well and into a retirement community filled with strangers? Just think of all the benefits waiting for you.
• Single-story living.
One level means those facing troubled knees or aching bones aren't forced to climb stairs.
• Birds of a feather.
Your neighbors are unlikely to be screaming teenagers on skateboards; they are people just like you.
• Little or no yard maintenance.
The homeowner association mows lawns, waters gardens, trims trees, sweeps walks and, in areas where it's needed, provides snow and ice removal.
• Resort living.
Fun-filled activities are located within walking distance or an easy commute. All fees are included.
• Mix work with play.
Many of today's seniors are not ready to live a life of 100% leisure and want to continue working or perhaps start a new career. Homes in retirement communities generally include an office, den or separate workspace.
It's also all the intangibles like human services, religious diversity, community spirit, healthcare and lifelong learning that are the cornerstones of these master planned retirement communities.
When choosing where you will retire, ask yourself, what type of life do I envision?
I specialize in helping buyers and sellers invest in real estate in the Northern Virginia area to include Loudoun County and surrounding areas including Clarke, Fauquier, Prince William and Fairfax Counties. Some of our local neighborhoods include Leesburg, Ashburn, Sterling, Potomac Falls, Brambleton, Broadlands, Lansdowne, River Creek, Belmont Country Club, Beacon Hill, Shenstone, Waterford, Lovettsville, Lucketts, Purcellville, Hamilton, Round Hill and Bluemont
Friday, September 2, 2011
Selling Your Home In A Buyers Market
Many experts have declared that any meaningful housing rebound will begin soon; and how long have we heard that? Home prices continue to decline fueled by tight lending standards and a rising supply of houses on the market.
In today’s market you have to be determined to sell and face the reality in many regions -- it's a buyers' market, and you will be competing with a growing supply of motivated sellers to get buyers interested in your house.
When trying to sell your home in a buyers' market, the three most important factors are price, condition and flexibility. Just because you may have paid too much for your home doesn't mean buyers think they should have to pay; pricing must be based on today’s market, no matter how difficult it may be for you to realize that.
Price It Right: Real estate pros say the key to selling a house is to "price it right." Set the price at what you can get, not what you think its worth. The fact is, it doesn't matter what you think your house is worth -- the only thing that matters is what a buyer is willing to pay. You don't want to over-price your house because buyers ignore it and your listing will lose its freshness and appeal, not to mention the uncompensated effort of keeping the home spotless during the showings. Also, the "original listing price" and "current asking price" are on your home's Multiple Listing Service (MLS) listing; if you do not show some decline from the original offering price, some buyers will see it as a sign you have unreasonable expectations of what you can fetch for your home.
Research Local Market: The best way to know if your home is priced fairly relative to comparable houses for sale is to compare your asking price to comparable homes in your community.
1. Get the listings of the houses in your area, and the price range. Look at the listing for every comparable home that is or was listed in your neighborhood over the past six months.
2. Compare similar properties; make adjustments for locations, age, upgrades and lot sizes and come up with a range of values.
3. Also, get a list of the recent sales prices and the original listing prices of comparable houses in the area. You can track this down on web sites such as www.zillow.com and www.realtor.com
Get a Pre-Sale Inspection: Sellers are strongly advised to consider getting a pre-sale home inspection, especially if their home is older or in need of repairs. They can either use a clean home inspection report as a selling advantage or take care of the repairs listed on the inspection report.
And lastly, be flexible. In this market, buyers will expect to pay less than the asking price. They will be armed with the original list prices and final sales prices of comparable homes and will know the price reductions other sellers are accepting.
I specialize in helping buyers and sellers invest in real estate in the Northern Virginia area to include Loudoun County and surrounding areas including Clarke, Fauquier, Prince William and Fairfax Counties. Some of our local neighborhoods include Leesburg, Ashburn, Sterling, Potomac Falls, Brambleton, Broadlands, Lansdowne, River Creek, Belmont Country Club, Beacon Hill, Shenstone, Waterford, Lovettsville, Lucketts, Purcellville, Hamilton, Round Hill and Bluemont
Thursday, September 1, 2011
Qualifying For A Mortgage With Unconventional Income
Not everyone makes money the conventional way. Some people have sporadic sources of income but which sources of income will a lender use to qualify you for a mortgage?
Lenders will review all sources of income, but typically use only sources that are expected to continue on a steady basis.
They will distinguish between sporadic or occasional sources of income, and stable, regularly scheduled income. Borrowers can document supplemental sources of income by providing copies of bank statements showing deposits of amounts claimed, tax returns, and payroll/deposit stubs from employers.
There are special rules that apply to certain types of income, and these exceptions are reviewed case by case;
• Trust Income. If the trust is irrevocable and guarantees a payout for three years after closing, the income may be used. The borrower must provide a copy of the trust agreement and proof of two years of continuous payments.
• Social Security, disability and public assistance. This income must be verified as nontaxable. You’ll be required to provide documentation and tax returns. The borrower must also show proof that these payments are likely to continue.
• Unemployment income. Some lenders will allow this income to be used, if you can show you’re a seasonal worker. You’ll have to show that you have been receiving this type of income for the past two years. Proof is imperative, so you’ll have to show records of payments received.
• Notes receivable. If you hold a note and are collecting interest for a minimum of two years previous and will continue to collect this interest going forward, the interest may be added in as income. This doesn’t include a personal loan where your sister, for example, owes you $10,000 and pays you $100 per month.
• Rental income. You will have to show the lease that the tenant has signed as well as documented proof of the rental income, such as bank statements. Only 75% of rental income can be used towards qualifying a borrower for a mortgage.
The key factor for lenders to determine your income eligible for use in prequalifying you is continuity. Do you have continuous and reliable income that can be used to repay your mortgage? You can also include salary and/or wages from full and part time permanent jobs and employer paid bonuses that are paid on a predictable, periodic basis.
Those borrowers who are qualifying for a mortgage loan should pay special attention to the sources of income you use because it can help you understand how much you can really afford to pay for a home.
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