Tuesday, December 2, 2014

You Think You Can't Get Loans?

Many investors have almost given up on getting loans to buy investment real estate. It may be that their credit was ruined during the recession. It may be that they own over 10 properties and exceed the FNMA guidelines. Or, it may be that their income is not sufficient or their loan to income ratio doesn't work.

Nowadays, securing a loan from a lender is far more difficult and a lot of very good people get left out in the cold. However, there are alternatives. One such alternative is the Asset-based loan. This is a loan based on your stock portfolio (as a bonus your foreign friends can also get a loan against THEIR stock portfolio in 30 different stock markets worldwide).

At our ICG 1-Day Expo this Saturday, one of our expert speakers will be Mark McKay, who specializes in Asset-based loans.

Take a look at the descriptions of these loans by Mark:

Still the best and easiest way to finance your real estate investments.
·         Loan is leveraged against your stock/securities portfolio
·         Lowest interest rates in the nation
·         Not a margin loan and generally several percentage points lower than margin loans
·         Not credit score driven
·         No limit on number of properties owned
·         You maintain ownership of your stock/securities portfolio
·         You continue to receive all the dividends
·         Fast and easy processing – generally 2 or 3 weeks
·         So low doc almost NO DOC
·         Established as a line of credit, you only pay interest on what you use
·         Dual appreciation

Come hear Mark THIS SATURDAY near the San Francisco Airport (details at www.icgre.com/events). Send us an email at info@icgre.com and mention this blog and you and a guest can attend FREE.

Monday, November 10, 2014

Appreciation Rates Slow Across the US

Multiple sources report slower appreciation rates in the U.S. overall, year-over-year. The amounts vary from an average of a mere 2.6% all the way to 6%.

It’s hard to attribute that much importance to such general overall numbers. However, the U.S. is not one real estate market but a few HUNDRED local sub-markets. The state of Florida continues its march upwards in the aftermath of the recession and the price improvement that followed. Due to the much slower judicial foreclosure process in and due to the strain on the state's court system, there are still numerous foreclosures that started as far back as 2008 and are not resolved. This creates a steady “diet” of freshly foreclosed homes, adding to the supply equation and mitigating super-fast rises like we have seen in Arizona and Nevada.

The FL numbers should be superior to the average U.S. numbers reported.  In addition, the stable markets are becoming more popular. Texas is becoming a sellers’ market and Oklahoma City is attractive due to its stability, low unemployment rate (reportedly 3.8%), VERY low property taxes and the newly-found reserves of oil & gas; reportedly 3.5 times that of the reserves in North Dakota.

We will discuss this, as well as the ever-changing lending landscape (for the better that is), 1031 exchanges and year-end tax strategies at our upcoming 1-Day Expo on Saturday, December 6th from 9 to 5 p.m. near the San Francisco Airport (click here for details).

Mention this blog and you can attend free with up to two free guests (just email us at info@icgre.com). As always, there’s lots of learning, networking, extensive Q&A’s and meeting the market teams. This time, Dallas will be present in the new markets. Looking forward to seeing you there and Happy Holidays.

Monday, October 27, 2014

Lending About to Get Loosened

The WSJ reports  (in an article on Saturday 10/18 by Joe Light), that Fannie Mae, Freddie Mac and mortgage lenders are in discussions to ease lending standards; including loans with 3% down to homeowners and allowing people with weak credit access to home loans.

Apparently an agreement is in sight to enact these measures.

Even if none of this trickles down to investors (which I doubt), this is great news. As more people qualify for loans, greater demand for homes is likely to help push values up in many markets. It will also be easier to sell investment homes due to the larger pool of potential homeowner buyers.

I suspect that, as usual, the more lax lending standards will reach investors in one form or another; making investors able to increase their portfolio at the current incredibly low rates (from a historical perspective). We are already seeing a local lender in Oklahoma City lending to foreigners at good investor rates (albeit at 50% down), as well as to investor purchases for investors owning between 10-15 financed properties (also with 50% down. In fact the loan is identical to the foreign investors’ loan). This lender has already agreed to lend in Atlanta and may soon expand to other states as well.

This is positive news for investors, no matter how you slice it.

Monday, September 29, 2014

What Property Managers Do & Why You Should Let The Pros Manage It

A full-service property management company has four coordinating functions: people (tenant screening); financial (rent collection and disbursement, accounting services); construction (maintenance and repair); and legal (lease agreements, eviction proceedings). They are responsible for renting and managing your property in all its aspects, and will offer these services:

-Advertising and marketing
-Property showing
-Tenant screening, including credit checks and background checks.
-Lease negotiation
-Rent collection
-Repair coordination and oversight
-Property inspection
-Monthly and annual accounting
-Lease renewal
-Tenant negotiation
-Eviction services

After you sign on with a property management company, they determine the monthly rental rate based on comparable rentals in the surrounding area. The property manager then advertises the rental, using all the means at their disposal, including newspaper advertising, signage, Web based advertising, and multiple listing services.

The property management company will show the property, collect tenant applications, conduct tenant interviews and credit checks, and review the rental history of potential tenants. They will offer recommendations on the best tenant for your property. After the lease agreement is signed between you and the tenant, the property management company will make sure that your rental property is in move-in condition.

Each month the property management company will collect rent from your tenant. The check will be deposited in a large trust account in which you, the property owner, have a separate account. You are paid by the property management company out of this trust account.

The property management company will keep you apprised of any necessary repairs and will coordinate the repairs by contacting tenants to arrange times for vendors or repairmen to come by. Often, property managers work with a select group of contractors with whom they’ve negotiated discount pricing.

The property manager understands the state and local landlord-tenant laws. This is extremely important if any problems arise with your tenant. A good property manager can help you stay out of small claims court and knows how to conduct a tenant eviction so that it’s effective yet abides by state and local laws.

An important part of property management occurs when there’s a tenant turnover. A difficult aspect of rental management is distinguishing normal wear and tear on a property from excess wear. The property manager knows how to tell the difference and how to determine the correct amount of the deposit refund. They can help you avoid any disputes over this issue, which is often a troublesome one for property owners.

For more information and to find out important questions to ask potential property managers; reach out to me directly at gorel@icgre.com or turn to my book, Remote Controlled Real Estate Riches: The Busy Person’s Guide to Real Estate Investing available on amazon.com 

Friday, September 12, 2014

Construction Loans Are Gaining Strength


In a Wall Street Journal article from a couple of weeks ago by Kris Hudson, it is indicated that construction loans posted the largest gain in the second quarter of 2014 since its recovery began about a year ago. According to Hudson, outstanding construction loans for both residential and commercial projects increased to $223.2 billion in the 2nd quarter, up 4% from the first.

The overall lending environment, not only for construction loans but also for individual investor loans and even foreign investor loans, is getting more open and the willingness on the part of banks to lend is increasing.

As for the construction loans, what it means for us as individual Single Family Home investors is that our new-build markets are expanding and will continue to do so.

We are already buying brand-new builder-built homes in the Oklahoma City metro area. Local lenders are extending loans to FOREIGN buyers (!) as well as to American investors with up to 15 outstanding home loans (5 more than the FNMA limit).

Not only will we discuss this at our 1-Day real Estate Expo this Saturday (near SFO – details at www.icgre.com/events), but due to the massive changes in the lending landscape, we will have a special session just for a lenders panel to discuss residential, commercial, hard-money and foreigner loans.

Anyone citing this blog post can attend for free with up to two free guests – just email us at info@icgre.com and show up for an amazing day of information, learning and networking.