Investment property loan types

Type of loans: (a) Owner occupied: FHA loans for 1-3 units : property must be in function conditon per hud guidleines Usually 3.5 % down or more based on lender. (b) Owner occupied FHA rehab loans: property requires 12K-35K (streamline) loans or Full 203K loans. Usually 3.5% down or more, check with lender. (c) Commercial loans for investors or owner occupants of mixed use, all investors purchases over 4 residential units. Usually 10 to 50% down depending on lender, buyers credit, and property condition. (d) Hard money private lenders or investors. Lender sets deposit amount and terms. Remember if you have other investment property or are self employed you need current profit and loss statements for each business or property. Also lenders may cap the number of properties that you maybe able to purchase under each entitys name.

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.

MassHousing's “Get The Lead Out” Loan Program Expanded I just got this on the expanded program. Evereryone that has units with children under 6 in them without a certificate needs to take advantage of this. MassHousing announced a major change in the “Get the Lead Out” lead paint removal loan program that will now allow all qualified households with children under age six to obtain zero-percent financing to remove lead paint regardless of whether the child is lead poisoned or in case management. Before the program change, zero-percent, deferred financing was only available to households where a child was lead poisoned or in case management the Childhood Lead Poisoning Prevention Program (CLPPP). For more information about the Get the Lead Out program, including income limits, loan limits and how to apply, clidk the words to the right for details: https://www.masshousing.com/portal/server.pt?open=512&objID=228&&PageID=305&mode=2

Fair Market Rents 2013 per HUD proposed rental guide

Remember rents may need to be adjusted up or down based on neighborhood area, condition of property, upgrades, etc. Rents will also need to be adjusted based on if utilites are included or exclude, appliances, bathrooms, parking It's also a good guide for a quick check to see if you rents are in line with your competition. The latest table by county are area is located at: http://www.huduser.org/portal/datasets/fmr/fmr2013p/FY2013B_SCHEDULE_B.pdf Remember this is a large area that is covered by each estimated rent so this should be assumed as the average rental for the entire area for a property in good condition. Some areas rents will not be as high. Others will be higher.

Which house is easy to sell: the one with the ugly outside or inside?

This is really easy if you thing about it. Yes your first impression is important but you can change that first impression by wanted a buyer to see more with a sign that says I'm Gorgeous inside, don't judge a book by its cover, or inside photos on information in a listing or flyers. On the other hand, a house with a beautiful exterior that is ugly on the inside and gorgeous on the outside gives you a felling like a ballon quickly deflating. As long as the shell of the home doesn't have structural defects the last impression maybe more important than the first as long as you make the buyer want to get past the front door. An added bonus maybe that an ugly exterior may give you a lower assessment, plus the exterior can almost always be repaired while you still occupy the property.

How do recent sales effect your property value.

Property values are set by what a ready, willing, and able buyer is able to purchase your property or simial properties for based on either cash or financed /lender approved sales prices. While cash buyers sales only require documentation of avaialalbe funds at the time of offer, Purchase & Sale Agreement (P&S) and closing financed sales require comparable sale. These comps are usually with in the immediate area or a five mile radius with in a 3 month period. However, the area or time frame maybe extended to a larger area or time frame for unique or specifi property classes for uncommon sales of real estate. If sales prices go up your values go up; If sales values go down then your base value goes down. In all cases some adjustments should be made for location, property condition, area amenities, upgrades, feature missing/improvements.