Thursday, June 30, 2011

Aha! The WSJ Takes Note: Investors Buying and Holding

I've mentioned that eventually the popular press will catch ip to reality: NOW is the time to buy and HOLD real estate.

Check out this Wall Street Journal article. The note that there IS competition for properties- a lot from first time buyers who want to buy and hold.

Can you find them and mange the properties for them? They need professional management or they'll be selling at distressed prices in about two years!

Are YOU buying and holding? Where? How? Why?

Tuesday, June 28, 2011

Transaction #4 of 52 in 2011: Success! Contract Buyers Refinance with the Bank

All too often, people who "rent to own" or "lease option" or "buy with owner financing" never complete the transaction- they never own the house.

At Clear Day, our goal is for every person who inters into a "creative financing" purchase with us to complete the purchase so they can enjoy the benefits of ownership that they desire. With Clear Day, the buyer has all of the control- it is up to them to complete the purchase, yet at the same time we are willing to do what it takes to help them complete the purchase, if it is reasonable and legal and a win-win solution.

A Couple Purchases a House FIVE Years Sooner than Planned!
So transaction #4 (yes, this is out of order!) revolved around a couple that purchased a house from us in July of 2010. She had mid-500's credit scores and he had NO credit score! They had been through bankruptcy and he never applied for new credit.

The couple and Clear Day met with a credit repair specialist and he gave us the opinion that they were only six months from having the needed credit to get bank financing. They were stunned! They had been told that it took seven years to qualify for a bank loan and here they were looking at year three and qualifying.

We moved ahead with the sale and they purchased it for about $2,000 more than it later appraised for. The couple immediately started to repair their credit.

Eighth Short Months Later
It did not take six months, it took eight months to get a bank loan. That is still almost 4 1/2 years sooner than they anticipated. The refinancing lowered their interest rate significantly and their monthly payment went down almost $200 per month.

There was one challenge when they refinanced: Their credit scores were about 20 points to low because their debt was about $500 too high. The credit repair coach / mortgage broker said it would take another 1-2 years to get their credit up if they just made monthly payments. Solution? Clear Day lent them another $500 that they used to pay their credit card. Result: Their credit scores went up and they qualified for the loan.

They are happy in their new home. They are happy to have a low-interest, fixed-rate 30-year loan. They are happy with Clear Day to make their purchase and refinance happen.

Monday, June 27, 2011

Foreclosed homes: Fannie Mae and Freddie Mac hold summer clearance sales -

Good idea, but why include only owner-occupied and not real estate investors? We are helping clear-out inventory 2, 3, or 4 houses a quarter. We are their best clients, but we are treated like their worst clients.

Once again, government genius at work.

Foreclosed homes: Fannie Mae and Freddie Mac hold summer clearance sales -

If you are an investor, how do you feel about being treated like a second-class client?

Saturday, June 25, 2011

With home market in tatters, high-end sector suffers even more | The Salt Lake Tribune

The market as a whole is down. The high-end down more than entry-level.

We have always focused on entry-level housing. There will always be demand for solid 2-4 bedroom houses with 1-2 baths that rent for $800 - 1,200 per month.

This is what happened to local high-end housing:

With home market in tatters, high-end sector suffers even more | The Salt Lake Tribune

What do you invest in? High-end? Low-end? Somewhere in-between?

Wednesday, June 22, 2011

Post Recession Real Estate Boom Inevitable: Steve Dexter, Real Estate Expert, Pens Article Predicting Better Times Ahead

We think there will be a boom in real estate as the economy recovers, so do other investors.

Post Recession Real Estate Boom Inevitable: Steve Dexter, Real Estate Expert, Pens Article Predicting Better Times Ahead

What do you think?

Transaction #16 of 52 in 2011: Investor Refinancing Still Lives!

Have you heard that it is impossible for a real estate investor to get a loan on an investment property? It's just an ugly rumor!

One of the strategies that we are using when we sell properties on contract to real estate investors with good credit is that we agree:
  1. The investor who buys from us on contract will get an equity line of credit from a financial institution to repay Clear Day Capital as much as possible
  2. Clear Day Capital will carry a second for the balance of the purchase price
Pretty simple, right? Yes!

Transaction #16 was the refinance of a duplex we sold on contract. The refinance went smoothly. It was with Golden West Credit Union and was fairly quick. The biggest challenge was the appraisal was much lower than hoped. Duplexes are on sale and it really dragged the price down.

The good news? We found two banks that are offering up to 75% investor loans- fixed rate and 30 year amortization. You'll have to keep reading to learn more about them.

Monday, June 20, 2011

Buy vs. rent: These days, buying wins - May. 13, 2011

We don't look at winning vs. losing when we think about home ownership. We think that everyone can win by dividing the seven benefits of home ownership.

If you want to see a traditional view on winners vs. losers in the housing market, take a look at this story from CNN Money:

Buy vs. rent: These days, buying wins - May. 13, 2011

Either way- buy or rent, contact me if you ever want to learn more about sharing the benefits of real estate.

Friday, June 17, 2011

Bryan Ellis Real Estate Letter - SEC May File Civil Fraud Charges Against Credit Rating Agencies

It's about time. The major companies that contributed to the HUGE miss-steps by note providing the services they were contracted for, and worse- being complicit in misleading investors, the government, and the public should be held accountable.

Bryan Ellis Real Estate Letter - SEC May File Civil Fraud Charges Against Credit Rating Agencies

Thursday, June 9, 2011

Transaction #18 of 52 in 2011: We Sell a Property and Take a Long-Term Interest

Clear Day never wants to sell real estate. Our goal is to have long-term real estate holdings that will bring us income for the next 30 years or more.

Once in a while, we decide that the best opportunity is to sell properties- but we STILL want to have a long-term interest even after we sell. Here is the scenario:

We foreclosed on a property that had one (1) lot with two (2) houses. The first house was a 2 bedroom / 1 bath with a 1-car garage. The second house was a 1 bedroom / 1 bath with off-street parking. Based on rents, the house was worth about $120,000. The problem? Banks won't lend on rent-based appraisals anymore. They will only lend on sold comparable properties.

The real estate investor that had repaired the property had tried to sell it for $120,000 unsuccessfully. The problem? People wanted the property, but appraisals were coming in much lower than justified by rents OR the square footage of the two properties combined. Why? Because the appraisers only county the larger property as "regular" square foot value. The second, smaller house was only counted as an "extra" building- like a shed!

Why was it a shed? Because those are the rules! No further explanation given by the appraiser.

So when we were approached by an investor who liked the property because of the great cash flow, we sold it to him at a slight discount to full price. He received what he wanted- growth, profits, income, tax benefits, and amortization.

We sold it at a discount because he was willing to lease the property back to us and share the cash flow, growth, and amortization. We received what we wanted: a long-term position in the property that gives us ongoing cash-flow from rents and property management as well as long-term profits when the house sells at a much higher price than we can sell it right now.

Here are the approximate numbers:
Income-based property value : $120,000
Sale price to investor : $110,000

Monthly rent : $ 1,300
Monthly property management : $ 130

Quarterly Additional Cash Flow : $ 200

Right now we are lining up more properties for more investors to work with us and share growth, equity, and cash flow. Interested? Let me know.

Tuesday, June 7, 2011

Why You Need a Good System to Screen Tenants

The title of this article says it all. If you own investment real estate, be prepared for knots in you stomach when you read this.

Lesson: Careful screening of tenants is NOT an option! The only thing more expensive than a vacancy is a non-paying tenant. : Carter: Landlords say Newark man refuses to pay rent, trashes apartments, then ties them up in court

What's the longest someone has squatted in one of your properties?

Sunday, June 5, 2011

Bank of America: The Tables Are Turned

A small piece of poetic justice... Bank of America refused to settle a lawsuit so the plaintiff foreclosed on the local branch!

This will make you smile!

Well... Did you smile?

Let me know if you did!

- Posted using BlogPress from my iPhone

Saturday, June 4, 2011

Now is the Time to Use Your Credit to Invest

We are working with several credit partner investors to get them investment property loans for under 6%

Fixed mortgage rates drops for 7th straight week | The Salt Lake Tribune

Talk to other investors, friends and neighbors and then buy or refinance with great long-term loans.