Victor The Realtor

If your college student is getting ready to live off campus, buying a rental property or condo may be an option worth considering.  Of course, with high rental costs and the opportunity to create a tax shelter for your hard earned money, this is a strategy many parents have found to be beneficial.
An investment property is an excellent opportunity to put your money to work for you, and may even help offset some of the income invested into your child’s education.  However, there are various factors you should consider before making any final decisions.
1.    Long term goals – Although long term appreciation rates may be favorable, it is important to discern how long you intend to keep the property.  Within a few years your son or daughter will be finished with their education, and you will still be left with a property to care for.
Some individuals would rather keep the home as an investment and continue to rent the property out to new students.  Additionally, this may be a place that you will plan to use for future visits or football games long after your child is done with school.
The problem with solely relying on strong appreciation rates is that you may not be able to command the price you desire a few years from now.  So unless you are prepared to hold onto the property for a longer time period to make the investment worthwhile, this may be something worth reconsidering.
2.    Maintenance & management – Next, purchasing a rental property is a big investment, so you want to ensure that your property is kept in good condition.  Although your son or daughter may be extremely reliable, you may need to consider other friends or roommates that will have to share in on the rent.
Are you comfortable with trusting in 2 or more college students to watch after your property?  Also, it may be required to pay a property manager (especially once your child graduates) to help manage the home if you live at a distance.
Finally, it will be important that you can find reliable contractors to take care of any maintenance hassles and ensure that the property remains in tip top shape.
3.    Cash flow & taxes – After carefully reviewing the first 2 points, you may still feel that a rental property for your student is well worth the investment.  If this is the case, then there are a few things you must know about finances.
First of all, be sure that you are buying smart.  Work with a qualified agent who knows the area and can help direct you to the best deals.  They will be able to help you figure out projected rental income and appreciation rates as well.
After factoring in taxes, insurance, maintenance, associate fees, your mortgage, etc. you will want to make sure that you have some cash flow for extra profit and to cover unexpected problems that may arise down the road.
This will also make your investment pay off more in the long run and can free you up to invest in future properties as well.  For those who are married, you must be aware that there is a limit to how many itemized deductions you can write off if your gross income exceeds approximately $240K.
Therefore, though it is possible that you can include the taxes and mortgage interest as deductions on your second property, this is something you will still need to review with a tax professional.
Finally, be aware that the property can also be susceptible to capital gains tax once you are ready to sell.  Either way, you will still be eligible for some depreciation on your home and to write off a portion of your maintenance and utilities, so there are always good reasons to buy.
All in all, buying a rental property for your college student can be a wise investment for you and your family.  I strongly advise that you take time to sit down with your financial advisor and/or tax pro to discuss the options available to you.  For further guidance on locating a property, please give me a call at 541.501.1363.

Due to the mortgage crisis that our country faced over the last several years, there are continually more and more foreclosure properties that are being put up for sale everywhere you turn. Of course, this can be very tempting for homebuyers as people can sometimes get properties for 30% or even less on the dollar.
However, if you are considering a foreclosure property for your next purchase, then there are some common pitfalls that you will need to avoid along the way to protect yourself and your future asset. Let’s review some areas to be aware of before making any serious offers.
1. Avoid Making Emotional Offers: When you are planning on putting a bid down on a property, you need to be extremely confident with the home’s current condition, its true market value, and what will be needed to fully restore the property.
Too many buyers will think that they found a slamming deal and fear that they will lose the home to another bidder. So instead of taking the time to truly do their homework and complete the proper inspections and analysis, they can end up locking up a property for more than it’s actually worth.  Just because its a repo doesn’t mean its automatically a great deal.

2. Estimate Neighborhood Values: Consider what other comparable properties are selling for and talk to a real estate agent who has a working knowledge of the area. In fact, it’s a wise decision to thoroughly review these questions and any other recommendations your Realtor may make:

• Is this neighborhood a desirable location and how are crime rates?
• What schools would be available for my kids or future buyers?
• Were there any other foreclosures or investor sales that could negatively affect the future value of my home?
• How long do I plan on living there and how could that affect things?
• What type of appreciation should I expect?

3. Get Preapproved: Before you even start looking at homes, you must get preapproved on a mortgage in order to know exactly what you can afford. Sadly, many buyers can miss out on some phenomenal deals or spend hours of wasted time because they avoid this step. Show banks that you are a serious buyer and have your financing in place!

4. Get Professional Help: Not only should you seek the expertise of an experienced Realtor, but you may also need guidance from a real estate attorney or financial consultant as well. Each professional can ensure that you are making the right choices throughout the process and can protect you from any issues you may come across along the way.

Remember that there is a lot more than meets the eye when you are trying to buy a foreclosure property. Negotiating with the banks, filling out paperwork properly, and undergoing all the necessary inspections can be a very detailed and tedious procedure.
Therefore, I encourage you to give me a call today to get started. I have years of experience assisting other clients with buying foreclosures for their next home or investment property. Discover how I can help you to make a smart and profitable investment as well!

If you’re looking to buy a fixer upper here are some rules to follow:

• Pick the right location!
• Know Your Stuff
• Make sure you consider the time and cost associated with doing a rehab
• What are your financing options?

One of the most important aspects to buying a home is to ensure that you purchase for a fair price. Since there are certain key steps that you must follow in order to make a sound decision, it pays to have a knowledgeable Realtor on your side who will be able to help obtain the best and most realistic asking price for a property.

Determining Market Comparables

For example, one of the first ways that your agent will discover the price of a home is by researching local market comparables. In most cases, they will be able to bring up a list of properties sold over the last 6 months within a 1 mile radius. Properties should also not be bigger than 20% of the subject size.
Additional features to consider would be the neighborhood each home resides in, structural differences, bedrooms and bathrooms, overall condition and other amenities such as a pool, a/c, or garage. Other factors, such as if a particular home sold for much lower due to foreclosure is something your agent can uncover as well.

Houses That Have Not Sold

Next, many homes could be on the MLS for 6 months or longer without ever selling. Others that are comparable could have been taken off the market after not getting enough offers or being listed for too high. This is valuable information, because you may be able to get a particular property for a substantial discount or it may not even be worth pursuing.

Neighborhood Reputation & Appreciation

When it comes to buying a house, this is one of the most important reasons to work with a Realtor. Since your agent will have a familiarity with various local market trends and statistics, you will be able to learn what makes a particular neighborhood desirable and also which areas to avoid.
A lot of things can affect a home’s value such as the school district, crime levels, or even other properties located nearby (such as those burnt in a fire or properties that were a bank sale). In fact, sometimes these factors can even differ from block to block!
Your agent will also help you to assess the appreciation rates for various neighborhoods and future development plans that could affect home prices, so that you can get a decent indication of what to expect down the road. This can be extremely valuable information dependent on how long you plan to live at the said property and the length of time the home may need to sit on the market.

Appraisals & Inspections

After you place an offer on a property, you will have the opportunity to get an appraisal and home inspection as further due diligence. Even with an agent, there are sometimes issues that may arise with a property that could affect the home’s value that you were not even aware of.
Some of these problems could include structural issues, plumbing or electrical, termites or insects, mold or even water damage to name a few. Obviously many of these things could impact the price significantly and would either have to be fixed by the seller or renegotiated to get a fair price.
In conclusion, there are a lot of areas to consider when choosing a home and getting a fair price on a property. Since this is one of the biggest purchases you will ever make, it is crucial that you protect your interests and ensure that you are getting the best deal possible.
In order to get started researching homes in our local area, contact me right away using the information located above. I look forward to serving you as you search for your next future home!

Shopping for a mortgage is one of the most important steps involved in purchasing your next home. Since the terms and conditions that you agree to will impact your financial future for years to come, it is vital that you take the necessary time to research and compare the best packages available to you.
Many buyers tend to primarily focus on obtaining the best interest rates; and though this is an extremely important piece, there are a host of other factors to consider. Therefore, let’s discuss some of the other criteria that should be reviewed before signing on the dotted line.
First of all, please be wary of only searching for rates and quotes online. Although there are very reputable companies that can be found using an internet based search, it is wise to also spend time working with local companies and banks that are familiar with the current market. This is a very detailed process, so you should not base your decision on simply one or two sources.
As you have seen from the recent mortgage industry scare, it is typically best to invest in a fixed rate loan. With adjustable rate mortgages, you could be stuck paying higher amounts of interest and maybe even eventually owe more on the loan than the house is worth. Be sure to review this with your mortgage professional before making any final decisions.
Next, along with attractive interest rates may also come additional fees and terms. Be careful that you fully understand what you are signing up for before choosing your mortgage. Although the rates may look somewhat favorable, here is a list of some things to be aware of:

• Processing Fees—Items such as processing and underwriting fees could be added to the cost of the loan as well. Although you typically will have to pay a few hundred dollars for the application fee, there are other extras that may be attached as an added expense.
• Private Mortgage Insurance (PMI)—In order for lenders to protect their own interests, buyers will be required to pay for PMI on a loan until they have built up 20% equity in the home. These fees are calculated based on a person’s credit score.
• Appraisals—It is becoming more common for lenders to charge this fee upfront before an appraisal is conducted. Unfortunately, you will end up paying for this regardless of whether or not it gives you the evaluation necessary to obtain the loan.
• Points—Each point equals 1% of the actual loan amount. Many buyers can elect to choose a plan that charges points so that they can acquire a lower interest rate. Lenders will typically charge anywhere from 1-3 points (or even more), and these will be charged as a fee at closing. Whether or not you should choose a plan with points will be dependent on your available cash and how long you plan on staying in the home.

This is just a sampling of what may be included with your mortgage. It is best to find out up front exactly what you will be responsible for with all additional fees included. As long as you are working with a reputable company, you should get a good feel of what will be expected at closing.

Be sure to avoid working with any parties that seem to make unfulfilled promises, suddenly change the terms at closing, ask for more information than is necessary to process the loan, or overall make this an uncomfortable process for you.

There are more than enough resources available to you to obtain a loan that will suit your needs. Additionally, we would be happy to provide any additional referrals and feedback so that you can get set out on the right foot. Please contact us right away for more information on how to get started!

Contact Victor direct for immediate help! 541-501-1363

I just read a question-and-answer conversation between a USA Today editor and Robert Toll, the CEO of Toll Brothers, one of the nation’s biggest home building companies.

He pointed out that despite affordable housing, despite low home loan rates, the overall housing market is being restrained in its attempted recovery. He was asked about tightening credit, and he said that it’s tough to get certain kinds of loans right now but that none of that is what is really holding home-buying back.

So what IS holding housing back? Here’s what Toll said in the article:

“It’s fear, a lack of confidence in home prices. You’ve got an awful lot of talk in the media, discussing whether house prices are going to go down another 5%, 10%, 15% or 20%. I think time heals all. And we believe that down the road, we are going to go back into what was a normal housing market for a long, long time in the U.S., which is that housing goes up in value every couple of years.”

Fear. Lack of confidence. It’s a buyer’s market right now, but many buyers are sitting on their hands, or wringing them trying to figure out if it’s smart to buy. And Toll is right: The articles about whether home prices are going to drop to what level have got people confused and concerned.

But the fear is somewhat irrational. No one can predict home prices. No one can be sure that the home you are thinking of buying is going to be worth more or less than you paid for it in a year or two. Certainly no national news report is going to be able to.

But it’s the national stories that people are paying attention to. I have written this before, and will continue to drum it home: There is no national housing market. The price index of 20 cities that everybody keeps citing has no bearing on what’s going on in your neighborhood or on your street.

You wouldn’t throw an umbrella in your car tonight because it’s the rainy season in Hawaii, and the forecast there calls for rain. So why would you rely on housing data from other markets to form an opinion of our market?

Take the latest foreclosure figures from RealtyTrac, which compiles foreclosure listings data. RealtyTrac reports that five states account for more than half the foreclosures in the U.S. That shows you how easily national statistics can be skewed.

Foreclosures, in fact, have made real estate even more local, as they can effect one neighborhood more than the next, and even vary from street to street.

The lesson, then, is to NOT focus on national statistics. They are inconsequential. Meaningless. Do not form your opinion of the your housing market based on what you read in the national media.

It sounds cliché, but all real estate really is local.

Fortunately, Toll is right about the housing market. Time does heal all wounds. Things will turn around. Unfortunately, he is also right about how fear and lack of confidence are holding buyers back right now.

The fear and lack of confidence are no doubt causing many buyers to pass up a great buying opportunity, and that’s a shame. It’s especially a shame because the fear and lack of confidence are a result of buyers paying attention to media reports that have no bearing on their own situations.

It’s perhaps the very definition of Red Tape. Four years ago, Congress decided that the IRS should get into the banking business, authorizing it to give out no-interest loans to first-time homebuyers. That put the agency in the position of both collecting loan payments and issuing tax refunds to the roughly 1 million taxpayers who took advantage of the program.

Continue reading the full article here:

Red Tape – IRS snafu leaves taxpayers, refunds in limbo for months.