My New Blog

Alright.  Not only am I not the blog king, but I frankly am not convinced I am into bloggin what-so-ever.  Reality is, I have some awesome loan programs to offer first time home buyers.  Folks that are renting... even if you are afraid of buying a home, did you know there is an insurance program the seller of your new home can buy for you that covers you in case you can't make the mortgage payments because you have been laid off.  Yes, true.  Nova Home Loans, the company that I work for as a Loan Officer is the only company offering this kind of program in Arizona.  How about $100 down to buy a house.  Yes, a house.  Not a car.  Not a bicycle.  A house.  FHA Loan, buy a HUD foreclosure with escrows for new paint and closing costs covered for you.  What are you waiting for?  Ok, I know, prices are not high yet.  Better to wait until you can't afford to buy a house right?  Hmmmmm.

We need to talk.  jeff@jeffrockland.com

Investing in real estate since 1984 and still think it's the only real investment.  Email me. If you are renting now, you need to rethink your strategy in terms of your financial planning.

I have always tried to look at real estate investment from more than one perspective.  In doing so I have created a portfolio and mind set that has flexability.  This said, I am right there with the rest of you real estate investors who are feeling cheated by the drastic change in how investor mortgage deals are being priced in today's market.  On the other hand, the current market is teaching us to be more careful in our real estate choices and more thorough in our pre-purchase research.

Here are the three rules that I have tried to live by as a real estate investor:

1) Property must be purchased for less than current market value.  I call this rule:  MAKE MONEY TODAY!

2) Property must provide stream of income greater than its related expenses. I call this rule:  MAKE MONEY EVERY MONTH!

3) Property must be in an area that is positioned for growth and improvement.  I call this rule:  MAKE MONEY IN THE FUTURE - CREATE WEALTH!

Much has been said about speculation and loose lending lending practices leading to the current market conditions.  Current lending practices are thus not supportive of speculation - but there are still ways to agressively pursue wealth through real estate in today's market.  This should be a time for real estate investors to dollar cost average, purchase cash flow properties and build net worth.  Why is it though that many deals that would have closed in weeks are now taking months?  Many investors lost great deals of money because of an over supply of inventory and a deminished demand due in part to less borrowers being able to qualify for a loan.  And because many foreclosures are properties that were purchased by investors, current lending practices for investor loans are requiring a greater down payment.  All this said, I still think that a minority of the foreclosed properties were properties that followed my three rules when they were purchased.  Most of them were only adhering to rule #3 which will bite you in the but when the market shifts and there is over supply as we are currently seeing.  Cash flow real estate will weather more storms.

What do we do?

Well, if you have construction experience, or a remodelling crew and can put together a good budget and plan with accuracy, you may be in a position to take a short term purchase/fix up loan to purchase a distress single family residence and then refinance it for cash out and keep it as a rental property.  If you have good enough credit, down payment and income, there are other programs that will finance your purchase and fix up into one loan from the start. The only thing is that you will probably be restricted to between 70-80% LTV on your permanent financing, have to fully document your income and have to have good credit.  If your purchased property gives you positive cash flow after doing the above, then you can repeat this process until you are maxed out on the number of properties that your qualifications will allow.  By purchasing the properties under value, fixing them up and still having a LTV under 80% you are protecting the bank and yourself in terms of losses from a future short sale or foreclosure.

Remember the days when a person with 620 fico could get 100% financing on a non-owner occupied property with a stated income loan?  Well those days may never be here again.  Does this mean you should give up?  Of course not!  Now is the time to get creative.  Even if you were following the crowd into the real estate frenzie and lost your shirt!  Don't think you are alone and don't blame real estate as if it is a bad investment choice.  Supply and Demand have always ruled the market.  Even though investor loans are now priced higher, if the numbers work for you to achieve my three rules with the rates you qualify for, this might be a deal you should grab.

Please call me anytime to discuss your real estate investment strategies.  I would love to help!

Best wishes,

Jeffrey Rockland, Your Loan Officer for Life!