Important: The effects of government shut down on loans for purchasers and sellers.

Check with you lender if your buying or selling your home on the effects of the federal shut down effect on your home sale or pruchase: Items to review should include: (1) Type of loans that may need extension or need to be flipped to other types of loans including FHA, VA, USDA to convensional, hybrid, hard money, or in house portfolio loans that are closing today or during this period. (2)Cash buyer purchases and sales without government back loans that are not effected themself. by the shut down. (Conventional, hard money, portfolio or in-house loans and private loans). As always, the phrase cash is King will be heard multiple times today and during this period. (3) Loans of other parties in a multiple transaction that may effect closing dates of non-government backed loans. (4) Debt ratio impact of health insurance increases that may effect buyer debt ratio, etc. (5) Weighing offers on based on loan types. (6) Possible problems with short sales approved during shut down and the need to keep these property listed with contingencies accepting backup offers. (7) Federal bankruptcy delay in processing, filing, and approvals of cases and related claims and delays to releases or obtaining relelases of federal liens.

Proactive Investment property tips

(0) Prior to purchasing pull housing department, public record field cards, and building permit history, and housing court records. Read the files to see aoid or know in advance if your taking on prior owners problems. (1) Make sure all tenants are screened for prior credit, rental, housing cout, and fiancial history nationally. Get a written rent roll at time of purchase to see the status of all tenants rents including arrears, evictions, deposits, etc. (2) Make sure all tenants are listed on lease or tenant at will (TAW) agreement are in writing. (3) Make sure these written agreements include all required disclosures: property transfer/lead paint if built prior to 1978 with all required attachements, property condition report at time of move in or renewal of written TAW or lease. ALL agreements need to be signed by all adults over 18. (4) Clearly indicate boundaries of lease and storage areas and parking, restrictions and prohibited storage areas(example halls, yard, common area). (5) Make sure you understand state laws on first, last,& security deposits and lock change fees. If you plan to charge for other items such as water, pet deposits, renters insurance. Know your local laws. Make sure deposit interest is accured &/or returned to tenants per state law annually or transferred to new trustees acoounts at time of purchase/sale. (6) Spell out clearly trash requirements and storage. Storage containers by law may be required by law. (7) Verify eviction & move and store laws prior to needing them in your state. (8) Join a local home owners association to stay up to date on changes and how to hand issues in your owners association and for local advise from fellow investors. (9) Check you mail boxes monthly for names or occupants to avoid unnecessary tenant moving in or out surprises. (10) Post contact info for police or emergencies. If there is a neighborhood watch or officer assigned to the area introduce yourself to them to familiarize yourself with potential problems to avoid or to watch out for now or in the future.

Investor vs Owner Occupant residiential invesstment differences

Investors are looking for profits. Most owner occupants are looking for other units to pay for all or part of the monthly mortgage. Investors are looking for either a long term consistent cash flow or a quicker fix and flip return. Investors want a return of capital in at most 10 years: Owner Occupants are looking for yearly breakeven cost if possible. How do you know what your buyer is looking for and if this is a good potenatial profit for your client is dependent on what your client wants. The only way to discover this is to ask.

Investment Properties return factors to consider

If your planning on buying investment property the following factors must be considered: (1) The current condition and amount of maintenance the property needs now, (2) How well the current tenants and future tenants were screened to see if the current rent or future increases in rent are with in current renters budgets, (3) The cost of know or discovered repairs or improvements and if rents, increases in rent or additional loans are needed. (4) The amount of groos or net profit and loss to cover mortgages, taxes, expenses, etc. (5) Your avaialable time for maintence or management or the cost of additional labor to do this for you. (6) Your rate of return, profit or loss anticipated, bookkeeping of expenses, taxes, unforeseen factors that may arise. (7) A vacancy rate of at least 10%(or more) for each year to accont for late or unpaid rents or renatl losses from vacant units. Better screening, fully updated units with excellent workmamship, high rents with good ontime payment rental history and written leases, and low maintenance property monthly maintenace will amount in higher reliable returns. Poorly screened tenants, unmaintained properties, missing written lease or tenant at will agrement, older less updated unis with do it yourself prior owner repairs will likely result in low returns, possible losses, and higher vacancy/non rental income an the likelyhood of eviction or court costs and unforecseen expenses that will cut in to expected rate of return. No two properties are a like so the more data you have prior to & during the purchase the better equiped you are to judge your future and current costs and expenses to see if you have a reliable rate of return.