auraria fix and flip: Auraria RE Trends: Investor Loans - 12/23/08 10:05 AM
 Topic:  Special considerations for Investor loans The talk around the water cooler these days is all about LOANS. Who can get them? At what price? What if I already have a few loans, do I still qualify?  A year or two ago the question was at what price do I get a loan (those were the days!).  Today it is "am I still in the game?"     Here's the deal:  if you have an owner occupied loan and 3 investor loans you cannot buy any more properties and get Fannie Mae / Freddie Mac financing, meaning you can't get a conventional 30-year … (0 comments)

auraria fix and flip: Auraria RE Trends: Colorado Mortgage Broker Licensing News... - 12/23/08 10:02 AM
Colorado Mortgage Broker Licensing In response to the troubled national real estate market and Colorado’s high volume of home foreclosures, efforts have increased to make higher caliber professionals involved in real estate. Licensing, rules and regulations have become more stringent for agents, appraisers, title companies and mortgage brokers.  In regards to mortgage brokers, the below items are mandatory.  No longer can someone open up the Yellow Pages, claim to be a mortgage broker and then be compensated for placing a loan --- what a novel concept.  Before committing to a mortgage broker, please make sure that they are licensed in Colorado … (0 comments)

auraria fix and flip: Auraria RE Trends: Scrapes, Pops, and Newbies - 12/23/08 10:00 AM
Investing in Real Estate 9 – Scrapes, Pops and New ConstructionThis blog will discuss a type of real estate investment, scrapes, pops and new construction, in the Auraria area in Denver.What this investment is:  Purchasing a small home in an expensive neighborhood that may or may not need work.  The home is bulldozed and a new home or duplex is put on the lot.  Alternatively, the existing home is renovated and more square footage is added on.  A pop-top is adding a second story to an existing home to add more square footage (commonly, a master bedroom suite).Equity needed:  Being able … (0 comments)

auraria fix and flip: Auraria RE Trends: Condo Conversions - 12/23/08 09:59 AM
Investing in Real Estate 8 – Condo ConversionsThis blog will discuss a type of real estate investment, fix and flips, in the Auraria area in Denver.What this investment is:  A synthesis of the fix and flip and rental operations - purchasing an apartment building in a neighborhood dominated by owner occupants, then converting the building from apartment building to condominium.  Often requires renovation of the units to meet the expectations of owner-occupant buyers in that area.  Complex and time consuming, but has wonderful tax advantages compares to fix and flips and often has superior returns to all other asset classes.  Ideally … (0 comments)

auraria fix and flip: Auraria RE Trends: Fix and Flip Investing - 12/23/08 09:58 AM
Investing in Real Estate 7 – Fix and FlipsThis blog will discuss a type of real estate investment, fix and flips, in the Auraria area in Denver.What this investment is:  Purchasing a home that needs work.  The scope can range from the basic "paint and carpet" to extensive overhauls to scraping a decrepit property and completely starting over.  Usually does not involve tenants, and the objective is to get in and out of the property as quickly as possible.  Great for beginners with the right skill sets or the willingness to learn.Equity needed:  With hard money loans (defined in next paragraph), … (0 comments)

auraria fix and flip: Auraria RE Trends: Lease Options - 12/23/08 09:58 AM
Investing in Real Estate 6 – Lease OptionsThis blog will discuss a type of real estate investment, lease options, in the Auraria area in Denver.What this investment is:  A lease option (L/O) is Acquiring control of a property (though not necessarily ownership), then leasing the property to a tenant.  The lease is bundled with an option, so the tenant can (but does not have to) purchase the property for a given price within a given time frame.  Again you are seeking a tenant for a property, but usually for a slightly longer term (12-18 months) and frequently (though not always) with … (0 comments)

auraria fix and flip: Auraria RE Trends: Large Apartment Buildings - 12/23/08 09:57 AM
Investing in Real Estate 5 – Large (5+ unit) Apartment BuildingThis blog will discuss a type of real estate investment, large apartment buildings, in the Auraria area in Denver.What this investment is:  Still targeting tenants for 6-12 months at a time, buildings with more than five units are considered "commercial" property.  The loans are more difficult to qualify for, and usually a larger down payment is needed.  Uncommon for the new investor; this is usually what landlords with several years of experience "trade up" to.  Cash flows on larger buildings are more stable than for smaller buildings, and the economies of … (0 comments)

auraria fix and flip: Auraria RE Trends: Small Apartment Building Investing - 12/23/08 09:56 AM
Investing in Real Estate 4 – Small (2-4 units) Apartment BuildingThis blog will discuss a type of real estate investment, small apartment buildings, in the Auraria area in Denver.What this investment is:  Purchase of duplex, triplex or quadplex to be rented to tenants, usually for 6-12 month terms.  Usually what the rental home / condo landlords graduate to.  In most markets they cost a little more than a rental home, but are much more likely to cash flow on the average month.  Less cash flow risk; if one unit is empty you have other tenants that still help you with the … (0 comments)

auraria fix and flip: Auraria RE Trends: Apartment Rentals or Rental Homes - 12/23/08 09:55 AM
Investing in Real Estate 3 – Rental Condo or Rental HomeThis blog will discuss a type of real estate investment, rental condos or rental homes, in the Auraria area in Denver.What this investment is:  Purchase of a residential property to be rented out to tenants, usually on a 6-12 month lease term.  This is how most new landlords get started.  You can hire out all of the property management functions, but in many cases you will do many of them on your own.  There are smaller down payment requirements than for larger rental buildings.  The purchase process and financing process is … (0 comments)

auraria fix and flip: Auraria RE Trends: Buy and Hold - 12/04/08 05:33 PM
Loan Considerations for Buy and Hold Investors
  
  
As far as investment loans, little or no money down loans are impossible.  However, lenders do permit the use of Home Equity Lines of Credit or second mortgages from other properties owned by the borrower as a source of down payment.  Or, self-employed borrowers are using funds from business lines of credit to fund down payments or renovations (please note: there are asset seasoning guidelines for doing so and the debt incurred by accessing other credit lines must be accounted for against the borrower's debt-to-income ratio). Thus, we have clients leveraging themselves … (0 comments)

auraria fix and flip: Auraria Real Estate Trends: Fix & Flips - 12/04/08 05:32 PM
Loan Considerations for Fix & Flip / Short-Term Investors
 
 
Securing conventional financing on a fix & flip or short-term loan is not recommended.  Most conventional lenders sell off their mortgages to investors on the secondary market.  If the loan is paid off early (before six payments are made), the investor has not recovered their initial investment.  The investor will attempt to recover their loss from the lender, who will ultimately come after the loan originator.  The loan originator would then be obligated to pay back any premium paid out by the lender.  If such activity becomes habitual with the … (0 comments)

auraria fix and flip: Auraria Market Trends: Jumbo Mortgages - 12/04/08 05:30 PM
Loan Considerations for Jumbo Mortgages
 
For the Greater Metro Denver area, any loan amount greater than $417,000 is considered a jumbo loan.  Fannie Mae and Freddie Mac assign different thresholds for various regions across the country.  For instance, $417,000 is not considered a jumbo loan in a high cost city like San Francisco, yet there will still be higher rates for going above $417K. 
 
Due to the size of jumbo loans, they are considered greater risk for lenders, resulting in higher rates.  Rates have fluctuated greatly over the past few years on jumbos.  As of today, a 30 year … (0 comments)

auraria fix and flip: Auraria RE Trends: $200k - $417k Loans - 12/04/08 05:30 PM
Loan Considerations for Loan Amounts Between $200K - $417K
 
With all the doom and gloom publications that are mostly exaggerated, many potential borrowers believe that home mortgage lending options have dried up.  While underwriters and investors are scrutinizing files more closely, attractive rates and terms still exist for owner occupied purchasers seeking a conforming loan limit (under $417,000).  FHA and VA can still lend up to 100% LTV and conventional permits up to 97% LTV.  There are certain guidelines to meet when going to these high LTVs, but they are not impossible to surmount.
 
Every home buyer should first … (0 comments)

auraria fix and flip: Auraria RE Trends: FHA Loans - 12/04/08 05:28 PM
FHA First-Time Buyer Tax Credit
  
In an effort to boost the sagging real estate market and overall economy, first-time home buyers are being offered a limited time tax credit when purchasing a primary residence. 
The highlights of the tax credit are:
·   The tax credit is available for first-time home buyers only.
·   The maximum credit amount is $7,500.
·   The credit is available for homes purchased on or after April 9, 2008 and beforeJuly 1, 2009.
·   Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
·   … (0 comments)

auraria fix and flip: Auraria RE Trends: First Time Buyers - 12/04/08 05:27 PM
Loan considerations for a first time buyer
  
Lending guidelines are changing on a daily basis for every type of loan: conventional, FHA, VA & commercial.  Nevertheless, there are still very attractive first-time home buyer options available.   If you are or will be a first-time buyer, it is critical to speak with a loan officer before looking at homes.  It is a crushing feeling to view a home, picture making it your own and then find out that you cannot qualify to purchase it.  A loan officer will pull credit, analyze debt-to-income ratios, review assets and income and determine what you … (0 comments)

auraria fix and flip: Auraria Real Estate Trends: Understanding Loans 4 - 12/04/08 05:26 PM
How can you improve your FICO score?
To improve one's credit score, it's critical to understand the factors influencing a credit score.  The factors that contribute to a FICO score and the weighted percentages for each are as follows:
35% - timeliness of payments 30% - the ratio of used debt to allowable debt for consumer credit 15% - length of credit history (the more credit history and showing proof of consistent timely payment, the better the score) 10% - types of credit used  10% - recent credit inquiries and recent new credit The greatest driver behind a score is making … (0 comments)

auraria fix and flip: Auraria Real Estate Trends: Understanding Loans II - 12/04/08 05:23 PM
 
What is a FICO score?
FICO stands for Fair Isaac Corporation, a company that created the most used credit scoring model in the United States.  An individual's credit score is calculated through a statistical algorithm and is used as a factor in determining the likelihood of a borrower defaulting on a loan.  FICO scores are generally used for obtaining mortgages, car loans or consumer credit.  The scores are provided from the three major credit reporting agencies: Equifax, Experian and Transunion.  Typically, there is a variance amongst the scores since each agency has a slightly different scoring formula.  FICO scores range … (0 comments)

auraria fix and flip: Auraria Real Estate Trends: Understanding Loans Part I - 12/04/08 05:22 PM
TOPIC: Improving conditions in Denver's  market
There are some signs of strengthening in our Denver market.  The metro area's inventory of available resale housing decreased 20% to 23,120 units in October from October 2007.  Some of this reduced inventory is attributed to homeowners taking their properties off the market in frustration because their property is not selling, but lower inventory implies a strengthening market.  Remember, the Denver area had housing inventory of 31,989 units in July 2006. Home sales rose 14% to 4,265 in September compared to the same month last year.  This is due almost entirely to the lower-end of … (0 comments)

 

Nancy Armstrong

Denver, CO

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