Renters Plan to Continue Renting. Blame Uncertainty

Do you own rental properties? If you do, take heart for good vacancy rates for the foreseeable future.

People who are renting plan to continue renting. Why? Here are the reasons that I hear:

1. Difficult to get financing

2. Perceived difficulty to get financing, so qualified people don't even try

3. Fear of real estate prices declining further

4. Change of attitude- people don't want the responsibility of home ownership

5. Perception that it is more expensive to own than to rent

Read more about the trend...

Renters Plan to Continue Renting. Blame Uncertainty

What about you? Are you renting and continuing to rent?

The 20 Happiest, Healthiest Cities In America

2nd High Ranking in the same week!

This time Ogden, UT is ranked one of the happiest, healthiest cities in the U.S.

Farmington is half-way between Salt Lake City and Ogden, so I get the best of both cities.

Read all about it here....

The 20 Happiest, Healthiest Cities In America

One of my basic goals is to be happy and healthy, so I'm glad I live somewhere that supports both of those goals!

The Australian Subject-To Home Purchase

So I am sitting at the Pizza Factory with an investor friend and he is explaining to his partner how he bought a house last night...

A guy calls from Australia and he needs to sell his house in Layton, Utah NOW! It's been on the market for months with no nibbles an his family is about to leave for Australia to join home for his new job.

The bottom line: The investor is buying the property for $25,000 more than the owner owes on the property, subject to the underlying mortgages staying in place. Included will be some furniture, appliances and a 50" TV!

The buyer is paying closing costs and the monthly mortgage of $1,250 and it should rent for $1,600 or more!

Good deal, huh?

Financing Gets Lower and Lower

Financing rates for home owners is getting lower and lower. Record low interest rates have made headlines for the last few weeks. The Salt Lake Tribune announced that record low interest rates are fueling re-financing.

That's all well and good for home owners, but what about investment property owners? I'll write some blogs about two situations:

1. A new real estate investor who has two properties purchased on contract who has great credit, W-2 income, but put little money down and has an income level that does not support rental properties without the income from rents. He is trying to get financing for the 3rd time, after being rejected twice.

2. A Real Estate Investor who has held properties for at least 4 years and up to 6 years, has very high credit scores, very high W-2 income, and a lot of cash in the bank. His challenge? He has 11 properties in his name and most have high LTV's.

The New Investor

He has applied at a credit union that said "yes" to the pre-application, and then underwriting turned down the file. He then applied with a portfolio lender that doesn't follow federal guidelines. They said "yes" for two months, and then once again the underwriters said "no."

He is now working with a mortgage bank that has local preliminary underwriting. They have a loan officer that is prepping the file in accordance with the structure of the contract sale and the requirements of the lender. We will make adjustments to the structure of the contract sale to conform with the lending requirements.

The Seasoned Investor with 11 Loans

The 11 loans might kill any kind of refinancing, but we are going to try. He got one loan refinanced with HAMP- a federal loan program. CHASE did that loan and they were outstanding to work with. That one loan will reduced the monthly payment over $400 per month! It makes the property go from break-even to profitable.

Four other loans were rejected by Citibank under the same program. They were a nightmare to work with and ultimately came up with what we considered were excuses. They were incompetent at best. I would never work with Citibank again if I could avoid it.

I'll keep you up to date on both investors. Stay tuned....

Farmington, Utah is 12th on CNN’s ‘best places’ list | The Salt Lake Tribune

Do you love where you live? I do!

Now CNN is telling the world that I live in one of the "best places" to live in the U.S.

Seriously, read it for yourself!

CNN

http://money.cnn.com/magazines/moneymag/bplive/2011/snapshots/PL4924740.html

Salt Lake Tribune (see the other Utah Cities that made the top 100)

Farmington, Utah is 12th on CNN’s ‘best places’ list | The Salt Lake Tribune

We also used to live in Solon, Ohio. It's the only place we liked as well as Farmington! It's ranked #3 and we still have great friends there.

http://money.cnn.com/magazines/moneymag/bplive/2011/snapshots/PL3972928.html

Low Home Ownership = Good Rental Market???

So if people don't own a house, does that mean rentals will be in more demand?

Probably....

...unless there is a basic over-supply of houses

...unless children move in with their parents

...unless parents move in with their children

... unless young adults stop getting married

So read this article about home ownership...

U.S. home ownership falls to lowest since 1998 | The Salt Lake Tribune

... and then think about why NOW is a good time to buy real estate:

.... housing prices are LOW

.... interest rates are LOW

.... pent-up demand is HIGH

.... rent vs. price is HIGH

So why are you waiting to invest?

Private Mortgage- Money at High Interest Rates, Secured by Real Estate

Private mortgages are as old as real estate itself. People borrowing money from other people and then secure their loan using real estate as collateral.

Banks became popular and the lender of choice for most Americans, especially when the U.S. government starting promoting home ownership in the 1950's with the introduction of the 30-year mortgage.

Most Banks Sell Their Notes to Private Investors

Most banks sell their mortgages soon after they originate the loan. Until recently, most were sold to private investors, either directly or through REIT's and/or mortgage backed securities. These were pools of mortgages, all combined and many times jointly owned by multiple investors.

The quasi-governmental mortgage companies FannieMae and FreddieMac now buy 95% or more of the bank loans.

Where Did the Private Money Go?

Private money is still investing in first-position mortgages. The difference is the money is now backed directly by individual properties.

Want to learn more?

Click Here to for a FREE copy of the Private Mortgage Report. It's easy to read and will answer a lot of questions, including:

• Increasing security of your loan
• Why Private Mortgages are a hedge against taxes
• Long Term Income through Private Mortgages
• Using Balloon Payments to shorten the length of the loan
• Use Private Mortgages for Estate Planning
• How to Document Your Loan for maximum security

Want to learn even more?!? The CALL ME! I'd love to talk with you.

David Safeer 801.510.3566