Thursday, February 19, 2009
The housing plan--- I still don't think we get it
Is the government's plan only looking one step ahead? Hoping for Hyper inflation? How do you feel about paying other people's mortgage?
Monday, February 16, 2009
Opportunity- HUDS 203K program offers many buyers a fantastic opportunity
Tired of looking at homes that need a bunch of repairs that you do not want to pay for? Tired of looking at newer construction with high HOA and high mello roos or homes that have been done nicely but not to your taste? This program allows home buyers to obtain permanent financing when purchasing a home that will cover certain rehab costs. This could be a huge benefit to many buyers out there that have been looking at beat up bank owned homes or homes with $10,000s of thousands of upgrades done to someone else's taste. Or buyers that are not buying because of lack of funding for necessary improvements and repairs without dipping into important reserves. This could be a great option for buyers considering puting 10% down but hate the thought of PMI!
This loan can be used to fund up to $35,000 in improvements and can be done as part of an FHA loan. Therefor, it limits out of pocket expenses to a 3.5% down payment as an FHA loan. This could be an important tool to allow buyers to purchase a fixer (hopefully priced under market), and gain sweat equity. Here is my recommendation on how to best utilize this program.
Example
Buy a fixer worth $500,000+ after repairs for $400,000 or less preferably ($396,000) so that with 3.5% down + $35,000 for rehab, your loan balance stays under $417,000 and request the seller pay 5% towards closing costs.
Take a loan for $415,915
Put $15,085 down
Put another $5000 towards repair out of your pocket
You are now in the property for $440,000
New appriased value= $500,000
Cash on cash return= 290%+ that's tough to beat!
Moreover you now have $74,085 equity nearly 15% (nearly $60,000 in sweat equity)
If you were previously planning on puting 10% down, if you put the other 5% down you will have put a total of 8.5% down and about 9.5% invested (including extra $5000 pitched in for rehab) and have 20% equity and no mortgage insurance (speak with your lender)!
for more information visit:
HUD information on 203K
This loan can be used to fund up to $35,000 in improvements and can be done as part of an FHA loan. Therefor, it limits out of pocket expenses to a 3.5% down payment as an FHA loan. This could be an important tool to allow buyers to purchase a fixer (hopefully priced under market), and gain sweat equity. Here is my recommendation on how to best utilize this program.
Example
Buy a fixer worth $500,000+ after repairs for $400,000 or less preferably ($396,000) so that with 3.5% down + $35,000 for rehab, your loan balance stays under $417,000 and request the seller pay 5% towards closing costs.
Take a loan for $415,915
Put $15,085 down
Put another $5000 towards repair out of your pocket
You are now in the property for $440,000
New appriased value= $500,000
Cash on cash return= 290%+ that's tough to beat!
Moreover you now have $74,085 equity nearly 15% (nearly $60,000 in sweat equity)
If you were previously planning on puting 10% down, if you put the other 5% down you will have put a total of 8.5% down and about 9.5% invested (including extra $5000 pitched in for rehab) and have 20% equity and no mortgage insurance (speak with your lender)!
for more information visit:
HUD information on 203K
Thursday, February 12, 2009
Shevy Akason and Associates proudly present 22 Sierra Blanco, Foothill Ranch
Do not miss this, relocation forces sale. Unbelievable views
22 Sierra Blanco
Foothill Ranch, CA 92610
Offered at US$599,000 to US$640,000
MLS Number S563452
Type: Residential
Year Built: 1993
Bedrooms: 4
Baths: 3
Living Area: 2043 Sq. ft.
Lot Size: 4695 Square Ft.
Property Highlights
Catalina Views
3 car garage
Master bedroom view deck
Low HOA
community Pool
Community spa
1st floor bedroom
Nice yard
Cul-de-sac street
Dual paned windows
Property Description
Relocation forced sale of this beautiful view home on a cul-de-sac! This is dream home and an equity seller. First floor bedroom and full bath, 3 car garage. This home offers unbelievable views perched high in the hills of Foothill Ranch overlooking the city lights below. Views include Catalina Island, all the way to Dana Point and the Irvine Spectrum along with beautiful mountains! Plus a spacious back yard, gorgeous view balcony off of the master. The back of the home faces west allowing for fantastic sunsets. In addition, the master bedroom, dining room, kitchen, and living room have fantastic westerly views. The huge windows make this home bright and highlight the large back yard and views. Dual paned windows throughout, double sinks in master bath and 2nd upstairs bathroom, plus association pool and spa! Walking distance to Whiting Ranch hiking and biking trails. If all this is not enough, low tax rate and low HOA.
Shevy Akason 949.769.1599 shevy.akason@evergreenrealty.net
Saturday, February 7, 2009
The Wall or the Wave
The Wall or the Wave
Will the wall that the government is building to keep our country from drowning in the wave of foreclosures be too big? I set out this morning to write an article about the 4% plan that I’ve been hearing about. However, I was conflicted, as a realtor I saw huge potential for what this could do to help my clients to purchase homes, nevertheless, I also knew that in Orange County this might go too far and cause government subsidized increases in Orange County home prices, similar to the ones that got us into this mess in the first place, if not property regulated.
First, I’ve seen the inventory drop steadily in Irvine since the extra 90 day waiting period/ foreclosure moratorium passed, I’ve also been waiting for the wave of product that’s been left off of the market (read more about the moratorium). Of course, for those looking to buy in the past three months less inventory means higher prices. Even though the moratorium simply delayed the inevitable, if you want to buy a place today, more inventory coming in three months does not help you. Nevertheless, more inventory is coming and lawmakers are scared. With today’s realistic financing terms and the ARM and Alt-A loans adjusting there may be more price declines. Although price declines should mean more affordable housing which is exactly what we need, the government is against price declines because declines mean more to our economy than simply better affordability.
As crazy as it sounds, the government will do everything that they can to prevent more affordable housing as a result of more reasonable prices. Hence, we will surely see some huge measures in the stimulus bill to subsidize housing. The question is which will be bigger; the wall that the government is building or the wave of foreclosures that is bearing down on California. If the 4% mortgage idea passes and it is not heavily restricted I argue that the wall may be much bigger in Orange County and we may even see price increases for the two years this program is in place. Those that will benefit this most will be those that buy with today’s financing terms and prices and refinance using the new government subsidized loans. In fact, if 4% rates or subsidies similar may pass I will encourage my clients to buy as soon as possible and never sell. Especially as I see properties coming up at rental parity pricing using 5.5% and 6% loans, it’s tough to beat 4% thirty year fixed, even if we’re not at the bottom. However, with this type of subsidization in place it will be hard to imagine price declines. Moreover, as we know housing is a great hedge against the potential inflation that this “stimulus” plan has the potential to create down the road.
I am against government subsidization of housing that artificially increase prices. However, I am also against a complete economic collapse of our country. As a result, I’m going to play devils advocate and here is the argument. If properly regulated a 2 year period of 4% 30 year fixed interest rates will stabilize the housing market. Forget about inflation, the government doesn’t seem to care right now. If properly regulated this plan could be effective. In order to be effective the following provisions would need to be added.
1) debt to income must be below 50%
2) No stated income
3) Minimum 10% down for purchase
4) Loan amounts to be capped at 4x average income for the zip code the home is in -20% (for purchases)
5) Looking for other ideas that will keep this from sending prices artificially high
In conclusion, it’s tough to say which will be bigger, the wall or the wave.
What do you think?
To read more about the foreclosure moratorium and a great article about the 4% plan click on these links: foreclosure moratirium 4% loan proposal
Will the wall that the government is building to keep our country from drowning in the wave of foreclosures be too big? I set out this morning to write an article about the 4% plan that I’ve been hearing about. However, I was conflicted, as a realtor I saw huge potential for what this could do to help my clients to purchase homes, nevertheless, I also knew that in Orange County this might go too far and cause government subsidized increases in Orange County home prices, similar to the ones that got us into this mess in the first place, if not property regulated.
First, I’ve seen the inventory drop steadily in Irvine since the extra 90 day waiting period/ foreclosure moratorium passed, I’ve also been waiting for the wave of product that’s been left off of the market (read more about the moratorium). Of course, for those looking to buy in the past three months less inventory means higher prices. Even though the moratorium simply delayed the inevitable, if you want to buy a place today, more inventory coming in three months does not help you. Nevertheless, more inventory is coming and lawmakers are scared. With today’s realistic financing terms and the ARM and Alt-A loans adjusting there may be more price declines. Although price declines should mean more affordable housing which is exactly what we need, the government is against price declines because declines mean more to our economy than simply better affordability.
As crazy as it sounds, the government will do everything that they can to prevent more affordable housing as a result of more reasonable prices. Hence, we will surely see some huge measures in the stimulus bill to subsidize housing. The question is which will be bigger; the wall that the government is building or the wave of foreclosures that is bearing down on California. If the 4% mortgage idea passes and it is not heavily restricted I argue that the wall may be much bigger in Orange County and we may even see price increases for the two years this program is in place. Those that will benefit this most will be those that buy with today’s financing terms and prices and refinance using the new government subsidized loans. In fact, if 4% rates or subsidies similar may pass I will encourage my clients to buy as soon as possible and never sell. Especially as I see properties coming up at rental parity pricing using 5.5% and 6% loans, it’s tough to beat 4% thirty year fixed, even if we’re not at the bottom. However, with this type of subsidization in place it will be hard to imagine price declines. Moreover, as we know housing is a great hedge against the potential inflation that this “stimulus” plan has the potential to create down the road.
I am against government subsidization of housing that artificially increase prices. However, I am also against a complete economic collapse of our country. As a result, I’m going to play devils advocate and here is the argument. If properly regulated a 2 year period of 4% 30 year fixed interest rates will stabilize the housing market. Forget about inflation, the government doesn’t seem to care right now. If properly regulated this plan could be effective. In order to be effective the following provisions would need to be added.
1) debt to income must be below 50%
2) No stated income
3) Minimum 10% down for purchase
4) Loan amounts to be capped at 4x average income for the zip code the home is in -20% (for purchases)
5) Looking for other ideas that will keep this from sending prices artificially high
In conclusion, it’s tough to say which will be bigger, the wall or the wave.
What do you think?
To read more about the foreclosure moratorium and a great article about the 4% plan click on these links: foreclosure moratirium 4% loan proposal
Friday, February 6, 2009
Income opportunity in Lake Forest
Visit my website to see the latest income opportunity in Lake Forest. It's in a fantastic community that includes a pool, spa, and tennis courts. It's bank owned and well priced at $339,000 but not well priced enough. Visit Lake Forest,3/3, bank owned to see what I would recommend. This could be a great income opportunity and a fun project!
Thursday, February 5, 2009
$80,000 below rental parity!
This home is a fantastic value. Click on link for full report.
http://findmylandmark.com/Costa-Mesa-3-4-luxury-home-Value-buyer-opportunity-n25931.html
http://findmylandmark.com/Costa-Mesa-3-4-luxury-home-Value-buyer-opportunity-n25931.html
Investor opportunities in Costa Mesa
I recently featured a property that just sold in Costa Mesa below rental parity. To see this information please visit the page dedicated to this property on my website at http://findmylandmark.com/Costa-Mesa-n25918.html .
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