Boomerang Buyers in Southern California

Today, our preferred lender, Dave, is here to discuss the latest buzz in the market: boomerang buyers. Boomerang buyers previously went through a short sale, bankruptcy, or foreclosures, and are now eligible to come back into the market.

Loan programs improved in the last couple of years. Plus, the market became stronger and healed. A lot of those buyers don't know they can come back into the market because of programs offered by the lending community.

Many clients think that the seizing on a short sale is forever. However, you can get back in the market in as little as three years through FHA or two years with Fannie Mae. There is also an FHA back to work program that allows people with major credit challenges to get into the market in one year.

Additionally, there are several great grant programs available to boomerang buyers. This is free money that you can use for a down payment or closing costs! A lot of people may be able to qualify, so talk to a professional to see which program works best for you.

You don't have to be a first-time home buyer to qualify for these down payment assistant programs. With grant programs, you don't even have to pay the money back.

Keep in mind income guidelines are extremely aggressive with grants. For instance, in Orange County, it's about $98,000. In LA County, it's $80,000.

Ultimately, these opportunities are great for people looking to enter the market. If you have any questions for Dave or myself, give us a call or send us an email. We look forward to hearing from you!

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Why Should You Invest in California Real Estate?

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Homes have been appreciating in California at a steady rate since 1980. Actually, from 1980 until now, there has been a 5.9% average yearly increase. It's been fantastic riding this wave of appreciation, and now is still a great time to invest.

Investing in real estate is all about earning passive income, and we can help you do this! I can help you find properties that will net you a 6-7% cash flow every year plus your yearly appreciation of 5.9% amplified 5 times with the 1 to 5 leverage, 20% down payment controlling 100% value, which over a year period amounts to a 36% return. That's your best possible investment!

Real estate is a better investment option than the stock market, bonds, gold, silver, and many other things. There is no better long-term investment than real estate!

Next time I'll continue speaking about investments and I'll be comparing investment properties in Ohio and other states, and I'll compare them to investment opportunities in California.

Stay tuned for more investment advice!

Southern California Market Update

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As we move into the fourth quarter, many have asked us how the market is. Today, I’ll share some statistics with you. Luckily, the numbers are good! Specifically, I’ll be looking at data taken from January to September of this year. The area I’ll focus on will be from Alhambra to Rancho Cucamonga east to west and Pasadena to Anaheim north to south. This covers regions within the San Bernardino and Orange counties.

In this area, we’ve sold 12,946 homes. This is about 827 homes more than last year! That’s a 6.8 percent increase of sales.

The median price now is currently at $580,500. Interestingly enough, this average has also increased 6.8 percent compared to last year. Last year, it was $543,200 during the same time.

The market is healthy. Remember if you put twenty percent down on a house, that 6.8 percent translates back to 34 percent return on your money. If you have an investment in real estate, you now have a 34 percent increase.

Next time, we’ll talk more about investment. Why is Southern California a great place to invest? Find out next time!

What Is "Good Debt"?

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Very early on in my investment career, while I was still in college, I got an investment opportunity from a woman. She wanted me to give her $1,000, which she would pay back every month at 4%. I was intrigued, but my first thought was that it was a scam. So I asked her, "Why such a high interest rate?" She shared an eye-opener with me.

  
What this woman did every weekend was drive down to San Pedro to buy frozen shrimp from a whole-seller. She would then drive up to places like Fresno and Bakersfield, and sell them over the weekend in a refrigerated truck in a supermarket parking lot. 

For every $1,000 she spent on the shrimp, she made $400 in gross profit, more than enough to cover my measly split of $40 a month in interest. So I gave this woman my $1,000 investment from my student loans, and she is now a successful supermarket owner.

The lesson I learned here is that there is a big difference between cash flow and an interest rate. This is why she wasn't afraid to pay me a 4% interest rate, because she is going to make 400% profit in cash. She could make $1,600 a month, just from doing this, and only has to pay me back $40. A good debt is a debt that generates positive income. 

Bad debt, on the other hand, is the debt you are most used to hearing about. Bad debt is using your credit card for everyday purchases and not paying off the balance every month. That's how you go broke. 

If you have any questions for us, feel free to give us a call or send us an email. We look forward to hearing from you!

How Can the Rule of 72 Help Your Next Southern California Investment Endeavor?

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Today, I want to share an important rule when it comes to real estate investing. This is the rule of 72. 

This rule states that if you divide the interest rate you get on an investment by 72, you will find out how many years it will take to double the rate of your investment. Additionally, if you divide the number of years by 72, you will find what type of rate of return will double your investment.

Right now, many people in Southern California think real estate is much too expensive. However, the average rate of return on real estate investments is around 5.5%-6.5%! In fact, if you leverage your money right, using the rule of 72, you can double your investment in less than three years.

If you have any questions about investment opportunities in the area, don't hesitate to reach out to me. I'm always available to help.

How Can You Sell for Top Dollar in Southern California?

You can't hope to sell your home for a lot of money simply by pricing it high. In fact, when you price your home higher, you're more likely to get less money for it - if your home even sells at all.

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When you go to sell your home, you cannot hope to put a large price tag on it and for it to sell well. Buyers simply do not respond to overpriced homes, and you need a much more complex strategy that will price your home at an attractive and fair market value. 

In the last seven years that I've been doing business, my list price to sale price ratio has been 103%, which means that I get people 3% more money for their homes, and this can add up to thousands of extra dollars in their pocket. 

One way that we accomplish this is by doing a comparative market analysis on your home to find what similar properties are selling for. We take into account many different aspects of your home, and we then decide what an appropriate price may be for your home.

The sweet spot when pricing is to price just below the market value, and then to have that attractive price bring buyers in and have them fight over your property. The end result is a bidding war where hopefully your home sells for much more than the original asking price. 

Pricing a home attractively takes a deep knowledge of a local market, and I have been in Southern California for quite some time now. I know the ins and outs of this market.

You can count on me to price your home so that it sells for top dollar! If you have any questions about how this can be accomplished, then please don't hesitate to ask me.

How Should You Prepare to Buy in SoCal?

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Welcome back to my blog. Today I want to talk to you about getting ready to buy because a lot of people in Southern California are on the same page. So here are a few things we wanted to remind you about today:

First, if you have had any recent expenses over the $1,000 mark, make sure you document it. When you go to get pre-approved for a loan, your lender will want all of this information. 

Secondly, if you take a look on your most recent tax return, under the 2106 form, you'll see that it's a form for employee-reimbursed expenses. If you have any big work expenses, like a mileage per diem, ask your tax preparer to do an amended tax return, because they will take this money into account when you qualify for a loan. 

The third thing you need to do is get online and get yourself a free credit report. Head to quizzle.com, credit.com, and creditkarma.com to get each of your three credit scores for free. 

If you have any questions for us, feel free to give us a call or send us an email. We are always here to help you get a leg up on the competition when it comes to buying and selling real estate here in Southern California.

Helpful Tips for Securing a Mortgage in SoCal

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Today I want to talk about getting ready to buy this spring in Southern California. Any seller, including yourself, that has just signed a listing agreement, is now a buyer. Because of this, you'll want to make sure you get pre-approved for a mortgage as quickly as you can, so you don't waste any time when it comes to looking for the perfect home.

The first thing you will want to do when getting ready to secure a mortgage is check your credit. Here is where you can get each of your three scores, for free:

Equifax: quizzle.com
Experian: credit.com
Transunion: creditkarma.com

We have some good news for people moving from a condo into a single-family home. If your income limit does not exceed $67,000, there is a new down payment assistance grant that can give you up to 3-5% of the purchase price. This is a grant, not a loan, so it's something you don't have to pay back.

If you want to know a little more about how to get yourself ready to buy or sell this spring in Southern California, give me a call or send me an email. I'd love to help you get ready to take advantage of this market!

What's the Best Way to Add Value to Your Home?

There are many great San Gabriel Valley area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 643-7090 for a FREE home buying or selling consultation to answer any of your real estate questions.

We have just sprung ahead, and springtime is here. Regardless of market conditions, the spring market is always hot and always the best time to sell your home. Today we are going to talk about how to prepare your home for sale so it sells faster and for a higher dollar amount than it would have otherwise.

The first thing you need to do is get rid of your clutter. Whether it be through a yard sale, salvation army donation, craigslist sale, or storage locker, get all the clutter and unnecessary items and keepsakes out of your home before you show it.
The next thing to do is repaint your home. Bright, neutral colors are always your best bet, and a fresh coat of paint really appeals to buyers.

Next, you need to clean your carpet, or replace it all together. If you need some carpet cleaning companies, we have some great references that can do your whole home for less than $120.

Last but not least, making some improvements to your kitchen and bathroom are two of the best returns on investment you can have. Replacing counters and flooring in bathrooms and kitchens always adds value to the home when you sell, and will allow you to enjoy the luxuries for a short time as well, without having to really pay for it.

If you have any questions, give me a call or send me an email. I would love to help you prepare your home for sale this spring. As always, stay safe and stay happy!

How Have Homes Become More Affordable?

There are many great San Gabriel Valley area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 643-7090 for a FREE home buying or selling consultation to answer any of your real estate questions.

Hey, everybody. I've got 2 great pieces of news for you today.

The first is that Fannie Mae and Freddie Mac have started new down payment programs, which will allow home buyers to purchase a home for only 3% down.

In addition to this, Fannie and Freddie have also reduced their mortgage insurance premiums to under 1%. Once your equity is built up more than 20%, you can cancel it at a 78% loan to value. FHA doesn't allow you to do this.

For buyers, the process of buying a home can be made easier when you include a renovation loan. This program is a private label, and incorporates 10% of the purchase price towards home upgrades, and it can close within 30 days. You can remodel the home how you want, and put all the TLC you want into it.

If you have any questions, I'm always here to help. Give me a call or send me an email to get in touch, and I look forward to hearing from you soon!

What Effect Can Taxes Have On Your Loan Amount?

There are many great San Gabriel Valley area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 643-7090 for a FREE home buying or selling consultation to answer any of your real estate questions.

 Hey everyone, thanks for joining me once again. Today I want to talk about the preparation involved when buying a home. Whether you are a first-time buyer or a sixth-time buyer, these tips will help anybody who is transitioning into a new home.

The first thing you want to look at is the neighborhood. Find a place with good schools that is also within a reasonable commute to work.

The next thing you will want to do is get pre-qualified. This is a very important step, as it will allow you to see what kind of home you can afford. Before you get pre-qualified however, you need to pay special attention to your tax return.

Most of the problems we see with tax returns and people getting pre-qualified is due to Form 2106: the un-reimbursed employee expense form. A lot of times accountants will be able to take thousands off of your tax expenses, but it will end up hurting you tremendously when buying a home.

Case in point: we had a client who got $18,000 in un-reimbursed employee expenses and ended up paying $3,600 less in taxes. However, that gave him $18,000 less to purchase with, and once the 4% interest rate was factored in, his affordability went way down. He went from being able to qualify for a $450,000 loan to barely qualifying for a $300,000 one.

So, take a look at your tax return, especially if you plan to buy in the next year. On your 2014 taxes, do a tax amendment eliminating the 2106 so when you purchase next year, you can afford more of a home.

If you have any questions, be sure to let me know. I look forward to hearing from you soon!

What Will The New Year Bring?

There are many great San Gabriel Valley area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (626) 643-7090 for a FREE home buying or selling consultation to answer any of your real estate questions.

Welcome back to our blog, and welcome to 2015! Today I have a lot of information to share with you, including formulas and trends that will set up the pace for how the market will do in 2015. Let's get right to it.

The first is collateral underwriting, which will be implemented by both Fannie Mae and Freddie Mac on January 26, 2015. This will include implementing an automated underwriting system, where appraisals will be fed through a pipeline to determine a rate based on 20 other comparable homes, instead of the typical 3. This will make the job of the appraiser much harder, because he will have 20 comparable homes to drive down rates and will make it harder for them to give higher rates.

The second change we are keeping an eye on is the re-gutting of the quality index. We predict an increase of 12% lesser quality quality loans in 2015, which will cause Freddie and Fannie to be cutting down a little bit on their control.

The 3rd thing we are keeping an eye on is a 12% increase in delinquency filing we saw in December compared to November. This will translate to additional foreclosures and short sales, but probably not until April or May.

Finally, we are keeping a close eye on mortgage interest rates this year. We've seen exceptionally low rates in 2015, but definitely expect rates to rise in the next year due to the Fed's decreased spending. We will be sure to keep you updated on the changes we see in the next year.

So there you have it, a quick market update on what we expect in the coming year. If you have any questions for us at all, feel free to send a quick email or give us a call. We wish you a happy, prosperous, and healthy 2015!