York, PA - Investing in Real Estate is by far my favorite subject and I pretty much eat, drink and breathe real estate investing. When buying real estate in York, my number one goal is getting the property for a discount. After doing so, the next question is figuring out how exactly I'm going to get the cash to buy the property if I decide to keep it.
Typically I'm looking for creative real estate financing. Perhaps lease options, owner financing, hard money...etc. But inevitably I find myself on occasion needing to get a mortgage. And let me tell you, if real estate investing is my favorite subject, having a mortgage is my least.
Bottom line...I hate having debt and want to do everything I can to get rid of it as soon as possible.
And you should too.
Now, it's been quite a few years but the talk of the town when it came to mortgages a while back was "How to Pay Your Mortgage Off Sooner". And the big AHA was the "Bi-Weekly Payment System" but for some reason it lost steem in the media and no one really talks about it anymore.
But you should.
Because...by following this system, you end up making 26 half payments, or the equivalent of 13 monthly payments each year. By doing so, you are typically able to payoff your 30 year mortgage in as little as 23 years!
Consider that a $250,000 30-yr mortgage with an interest rate of 6% would cost you $289,595 in interest. By paying bi-weekly, you will save $60,972 in interest.
To initiate it, all you have to do is contact your mortgage company and set it up. Everything pretty much takes care of itself on auto-pilot from there and you're good to go.
If you keep rental properties for income...talk about an increase in cash flow once your mortgage is paid off. Pretty nice huh?
Tuesday, September 29, 2009
Wednesday, September 23, 2009
Cash For Clunkers: How Foreclosed Homes In York PA Should Qualify?
This cash for clunkers campaign is just every where I turn and the other day after I heard about it for the first time I thought to myself...why on earth doesn't the government do something like this for York PA homeowners currently in foreclosure. I mean think about, we need something like that for the housing industry more than the car industry don't you think?
How exactly an industry like the American automobile industry (an industry that's been failing for years...not because of the recession but pure lack of will to compete with the Japanese and Europeans) figured out ways to tap into government bailout money blows my mind and annoys me. But that's a different story.
Anyway, back to the housing industry. I must say, the government is trying to help the individual and some of their efforts are working, for example the $8,000 tax credit for buying a home before the end of 2009. This program seems to have made an impact in York home purchases but what about the people losing their homes. What about them?
The Mortgage Debt Relief Act of 2007 was definitely a start. With this law passing, taxpayers weren't required to pay taxes on any debt that was forgiven related to a foreclosed home. Prior to this law, let's say you owed $100,000 and the bank was willing to accept $80,000 as the pay off for your mortgage - also known as a short sale. Well, that $20,000 difference was considered taxable income. Not anymore however. Definitely a step in the right direction.
But, banks need to do more and they need to be pressured by the government to do so too. And that's what I really want to talk about today. Here's why.
I'm currently negotiating a short sale for a Bank of America Pre-Foreclosure. The home has been condemned by the city of York PA as inhabitable. Out of all the properties I've invested in, this one has to be the worst. Honestly, I didn't have the ability to hold my breath long enough to even go upstairs so I just stayed downstairs when I and the appraiser inspected the property.
But I still made an offer on this property because the truth is, after spending maybe $20,000 on rehabbing this home, it'll be worth $40,000 - $45,000. Want to know how much I offered?
$5,000. Gotta say, that's the lowest offer I've ever made on a property.
So, today after about 3 months of going back and forth with the bank, they finally call me and tell me that my offer is too low and I should offer them $14,000. Which still is a pretty good price mind you but there's no way in hell I'm paying $14,000 for a property that's been condemned by the city of York as inhabitable and Bank of America knows that.
You see, it didn't take me long to justify to them why my offer of $5,000 was a good one. Our conversation ended with my bank contact asking me, "Ok Mikk, can you please get me some documentation from the city stating this property is condemned so I can get this taken care of"?
They'll have it tomorrow but more than anything...this is a property that should and definitely would qualify for a "Cash For Clunker Real Estate Program" if the government ever started one. Because believe it or not, I'm hoping my offer will be accepted but it might not. However, if there was some government pressure or some program like the cash for clunkers program designed specifically for this situation, the odds of it being accepted would be a whole lot higher. Maybe it's time!
How exactly an industry like the American automobile industry (an industry that's been failing for years...not because of the recession but pure lack of will to compete with the Japanese and Europeans) figured out ways to tap into government bailout money blows my mind and annoys me. But that's a different story.
Anyway, back to the housing industry. I must say, the government is trying to help the individual and some of their efforts are working, for example the $8,000 tax credit for buying a home before the end of 2009. This program seems to have made an impact in York home purchases but what about the people losing their homes. What about them?
The Mortgage Debt Relief Act of 2007 was definitely a start. With this law passing, taxpayers weren't required to pay taxes on any debt that was forgiven related to a foreclosed home. Prior to this law, let's say you owed $100,000 and the bank was willing to accept $80,000 as the pay off for your mortgage - also known as a short sale. Well, that $20,000 difference was considered taxable income. Not anymore however. Definitely a step in the right direction.
But, banks need to do more and they need to be pressured by the government to do so too. And that's what I really want to talk about today. Here's why.
I'm currently negotiating a short sale for a Bank of America Pre-Foreclosure. The home has been condemned by the city of York PA as inhabitable. Out of all the properties I've invested in, this one has to be the worst. Honestly, I didn't have the ability to hold my breath long enough to even go upstairs so I just stayed downstairs when I and the appraiser inspected the property.
But I still made an offer on this property because the truth is, after spending maybe $20,000 on rehabbing this home, it'll be worth $40,000 - $45,000. Want to know how much I offered?
$5,000. Gotta say, that's the lowest offer I've ever made on a property.
So, today after about 3 months of going back and forth with the bank, they finally call me and tell me that my offer is too low and I should offer them $14,000. Which still is a pretty good price mind you but there's no way in hell I'm paying $14,000 for a property that's been condemned by the city of York as inhabitable and Bank of America knows that.
You see, it didn't take me long to justify to them why my offer of $5,000 was a good one. Our conversation ended with my bank contact asking me, "Ok Mikk, can you please get me some documentation from the city stating this property is condemned so I can get this taken care of"?
They'll have it tomorrow but more than anything...this is a property that should and definitely would qualify for a "Cash For Clunker Real Estate Program" if the government ever started one. Because believe it or not, I'm hoping my offer will be accepted but it might not. However, if there was some government pressure or some program like the cash for clunkers program designed specifically for this situation, the odds of it being accepted would be a whole lot higher. Maybe it's time!
Tuesday, September 15, 2009
How much is that York, PA home really worth?
By far the most important and sometimes the most difficult question when it comes to real estate investing in York PA or anywhere for that matter is trying to figure out exactly how much a home is worth. Seasoned investors will pretty much always rely on their relationships with industry professionals like appraisers or realtors to find this out. As would real estate wholesalers like myself.
However, as times have gotten more difficult, it's harder and harder to find professionals who have the time to go out of their way to help you when sometimes it doesn't benefit them financially at all. It's sad when this happens but it's understandable.
So when it does and you can't get the information you need from either an appraiser or realtor, where should you turn?
You're probably well aware there's lots of places on the internet to turn to. Some require money and some are free but how do you know which are the most accurate.
Well, if you're buying homes in York PA or investing in York PA real estate or anywhere for that matter, here's my "opinion" and why you should listen to it.
Over the last decade, I've been involved in real estate investing and the mortage business and have seen a lot of appraisals over this time. And what I've been paying attention to is comparing the actual appraisal value to the FREE estimates available online with numerous sources.
By doing so, I've noticed a trend and seen first hand which one of these home value estimators comes closest to the actual appraisal value consistently. This is extremely important information for you.
I'll start with the worst and end with what I feel is the best source for you right now.
First off there is:
http://www.zillow.com/ (consistently is off target from the actual home values. The value indicated at http://www.zillow.com/ typically comes in lower than the actual appraised value.)
http://www.realestateabc.com/ (used to be pretty good a little while back but now the values match that of Zillow and in fact Zillow is referenced on their site as well.)
http://www.cyberhomes.com/ (this is a good one and the value estimates on this are pretty close to actual appraised values. And, they will also provide you pictures of the home and the surrounding area which is a nice feature.)
And by far...the best source I've found lately is.
http://www.reversemortgageguides.org/reverse_mortgage/property_value_search (it's a long one I know. It's something I stumbled upon one day in my search but belive it or not, the value estimates on this are very close to actual appraisal values. This is the one I now turn to first.)
Now, of course they're not 100% accurate but the closer you get, the better. And also, some addresses don't get found on either of these sites. Depending on where you are, there just might not be enough data.
Enjoy. Mikk.
However, as times have gotten more difficult, it's harder and harder to find professionals who have the time to go out of their way to help you when sometimes it doesn't benefit them financially at all. It's sad when this happens but it's understandable.
So when it does and you can't get the information you need from either an appraiser or realtor, where should you turn?
You're probably well aware there's lots of places on the internet to turn to. Some require money and some are free but how do you know which are the most accurate.
Well, if you're buying homes in York PA or investing in York PA real estate or anywhere for that matter, here's my "opinion" and why you should listen to it.
Over the last decade, I've been involved in real estate investing and the mortage business and have seen a lot of appraisals over this time. And what I've been paying attention to is comparing the actual appraisal value to the FREE estimates available online with numerous sources.
By doing so, I've noticed a trend and seen first hand which one of these home value estimators comes closest to the actual appraisal value consistently. This is extremely important information for you.
I'll start with the worst and end with what I feel is the best source for you right now.
First off there is:
http://www.zillow.com/ (consistently is off target from the actual home values. The value indicated at http://www.zillow.com/ typically comes in lower than the actual appraised value.)
http://www.realestateabc.com/ (used to be pretty good a little while back but now the values match that of Zillow and in fact Zillow is referenced on their site as well.)
http://www.cyberhomes.com/ (this is a good one and the value estimates on this are pretty close to actual appraised values. And, they will also provide you pictures of the home and the surrounding area which is a nice feature.)
And by far...the best source I've found lately is.
http://www.reversemortgageguides.org/reverse_mortgage/property_value_search (it's a long one I know. It's something I stumbled upon one day in my search but belive it or not, the value estimates on this are very close to actual appraisal values. This is the one I now turn to first.)
Now, of course they're not 100% accurate but the closer you get, the better. And also, some addresses don't get found on either of these sites. Depending on where you are, there just might not be enough data.
Enjoy. Mikk.
Monday, September 7, 2009
End of York PA Housing Crisis: I Don't Think So?
Earlier this year, as many as half of all transactions nationally were resales of foreclosed properties, largely at low prices. Since then, so-called normal sales (those not involving distressed or foreclosed properties) have risen while foreclosure sales have remained stable. This improved mix — together with cheap financing and a couple of popular tax incentives — helped to revive prices in some hard-hit areas. As such, the media has eaten this up and can't help themselves but proclaim the recession is coming to a close. But they are wrong!
You see...with schools opening up again and the summer home-selling season winding down, sales by nondistressed sellers are likely to fall in coming months. In addition, the slight increase in prices of home's sold is nearing it's end because of the expiration of popular housing subsidies. For example, the $8,000 federal tax credit for first-time home buyers in York PA along with across the nation is due to expire in December.
Another concern is that the housing problems appear to be spreading well beyond the questionable borrowers who were at the center of the first stage of the financial crisis - subprime borrowers. Now, 'prime fixed-rate mortgages' account for about a third of foreclosure starts, according to the Mortgage Bankers Association.
In addition, the pace of foreclosures could soon accelerate as mortgage servicers catch up on foreclosures they have delayed because they were too busy dealing with new mortgage modification guidelines. Truth is, I wouldn't complain too much about this, because it would increase the foreclosure sales in York PA, thus pushing prices down even further. Prime picking for the savvy investor.
You see...with schools opening up again and the summer home-selling season winding down, sales by nondistressed sellers are likely to fall in coming months. In addition, the slight increase in prices of home's sold is nearing it's end because of the expiration of popular housing subsidies. For example, the $8,000 federal tax credit for first-time home buyers in York PA along with across the nation is due to expire in December.
Another concern is that the housing problems appear to be spreading well beyond the questionable borrowers who were at the center of the first stage of the financial crisis - subprime borrowers. Now, 'prime fixed-rate mortgages' account for about a third of foreclosure starts, according to the Mortgage Bankers Association.
In addition, the pace of foreclosures could soon accelerate as mortgage servicers catch up on foreclosures they have delayed because they were too busy dealing with new mortgage modification guidelines. Truth is, I wouldn't complain too much about this, because it would increase the foreclosure sales in York PA, thus pushing prices down even further. Prime picking for the savvy investor.
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