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Thursday, March 28, 2013

46% Cheaper To Buy Than To Rent In Phoenix Scottsdale

Buying your home in Phoenix Scottsdale is 46% cheaper to buy than to rent. Even despite the rise in home values in the last year and a half.*

And keep in mind that rental rates are also on their way up!

And not only it is cheaper to buy, but are you taking into account the rise in home values in the next 5 years? How you could build equity and be worth more in the next few years than if you are renting and end up with nothing?

I estimate the market values to increase about 25% this year, and at least 20% in 2014. And the interest rates on mortgage loan rates are simply outstanding.

Keep in mind that for every 1% increase of mortgage rates, that like adding $10,000 more on a $250,000 house.

So waiting is the killer because of the double-whammy of the rise in home values and the inevitable rise in interest rates.

*Read more here: Study: Buying a Home Is Cheaper Than Renting

So, now you want to buy. What to do?

First call or email me to get the process started. It's that simple!

We take care of the entire process step by step, end to end.

Richard Bazinet - Realty ONE Group - Phoenix Scottsdale Real Estate
rbazinet@ymail.com - 602-300-7007

46% Cheaper To Buy Than To Rent In Phoenix Scottsdale

Monday, March 25, 2013

6 Reasons To Consider Hard Money Loans AKA Private Money Loans

A common misnomer about hard money loans is that they are from dubious sources and that is mostly false. Agree, some are but I'm not talking about those ones. I'm talking about private money loans which are not from your traditional financial institutions or mortgage lenders.

Did you know that if you get a mortgage loan from a mortgage broker, that it is likely from a private investor or a private investment fund? Well, many hard money loans and private loans are about the same. Except you deal directly with a portfolio manager.

These private money loans are generally customized to your particular situation and come in a variety of sizes, shapes and conditions and they allow you to get into real estate purchases that you  may not be able to  in traditional mortgage lending.

For example you can get financed now to purchase your next home even if you have had a short sale, a foreclosure or even a bankruptcy, the day after. Or to address other situations customized for your individual needs.

Another example, a common mistake for many real estate investors is that they focus on only one way of putting together a transaction. There are many different strategies and many different financing options.

So knowing when, how and what type of a private money loan will make you a better home buyer and/or investor.

Private money loans are a very common financing option for many home buyers and investors alike, but they also have their time and place.

What is a private money loan anyways?

The easiest way to explain a private or hard money loan is that it is private financing. Private  money lenders are people that have access to a pool of money that they loan out on real estate. This pool is usually the result of a group of investors pooling their money together to finance real estate. They are investing in the financing behind the property rather than the property itself.

Since this is private financing, a private money lender is going to charge higher interest rates for the money. These loans usually charge credit card type interest (6-12%). Because of the high interest, this is not a long-term financing option. Most home buyers and investors use these loans for short-term financing before the real longer more conventional loan as an interim loan.

A good example would be a home buyer who just short sold and would like to get back into the market as market values are appreciating at about 22% per year. So a typical scenario would be a private loan for two years followed by a conventional loan thereafter. In this scenario, the benefits far outweigh the costs significantly. So much so, it makes no sense to do otherwise, or even to rent a property.

Or if you are going to turn around and resell the property, then the interest rate is not a primary factor in whether you’ll do the deal or not. The return on your money is far more important than the interest rate. You are not going to have the loan long enough for the high interest to make a large impact. As long as your profit is still in the deal, it makes sense to use a private money loan.

If you are going to be using a longer term exit strategy like holding the property as a rental, you might use private money to get into the deal, and then refinance the property with a traditional loan. Someone might do this if they are unable to get a traditional lender to finance the purchase.

Private money loans are typically short-term loans. The majority of hard money loans will be 6 months to 5 years (sometimes more) in length. This will give you enough time to do what you need to with the property to make the deal work.

The reason that it is called hard money on a private loan isn’t because it is difficult to obtain. It is often called hard money primarily for three reasons:

1. The higher interest rates can make the loan more costly than other types of financing.

2. Most hard money lenders do not want to exceed 90% of the LTV (Loan To Value) or ARV (After Repair Value) for investors. As the borrower, you have to have some sort of a down payment. You need some skin in the game.

3. Often, the requirements to qualify are low. No credit checks, no income verification, no social security check, no seasoning of down payment, etc...

4. Speed of processing - FAST. The loan process is generally quite fast. So fast that it can be done in days, versus 30 to 45 days for traditional loans.

5. Flexibility. It does not get any more flexible in the mortgage lender business. Almost tailored to your very specific home buying.

6. You can purchase you really want.

The lender is going to give the loan based on the value of the asset (the property) rather than the financial strength of the borrower. The lender is going to be more concerned about the deal than they will be about you as a borrower.

So if you are thinking about buying your next property and you may require a private money loan, I'd be delighted to help you achieve your objectives.

Richard Bazinet - Realty ONE Group - Phoenix Scottsdale Real Estate

5 Reasons To Consider Hard Money Loans AKA Private Money Loans

Saturday, March 9, 2013

2 New BIG Rules Of Seller Financing - AKA Seller Carryback


In my November 2012 blog, I wrote about the end of creative Seller Financing as a result of the Dodd Frank Act amendments.


 2 New BIG Rules Of Seller Financing  - AKA Seller Carryback


Well, here’s an update: January 2014 is the new effective date of Seller Financing (aka seller carryback) Financing Rules.

Although many commentators and trade associations say that any sellers doing carry back financing start now to comply with the requirements of the Dodd-Frank Act, the requirements have been postponed until January, 2014.

Furthermore, on January 20th, the Consumer Financial Protection Bureau ("CFPB") provided some much needed clarity on seller carry back financing under Regulation Z of the Truth In Lending Act ("TILA").

According to the new rules, a seller can finance a purchase and will not be considered a "loan originator" under the act as long as one of two provisions applies.

   For the sale of three or fewer properties in a 12 month period and provides that a person is not a loan originator if:

1.         The person provides seller financing for the sale of three or fewer properties in any 12 month period to purchasers of such properties, each of which is owned by the person and serves as security for the financing,

2.         The person has not constructed or acted as a contractor for the construction of, a residence on the property in the ordinary course of business of the person,

3.         The person provides seller financing that meets the following requirements:

a. The financing is fully amortizing,

b. The financing is one that the person determines in good faith the consumer has a reasonable ability to repay, and

c. The financing has a fixed rate or an adjustable rate that is adjustable after five or more years, subject to reasonable annual and lifetime limitations on interest rate increased. If the financing agreement has an adjustable rate, the rate is determined by the addition of a margin to an index rate and is subject to reasonable rate adjustment limitations.

Or

  This is an exemption for only one property, but does not expressly prohibit a balloon payment. The act provides that a person is not a loan originator if:

1.         The person, provides seller financing for the sale of only one property in any 12-month period to purchasers of such property, which is owned by the natural person, estate or trust and serves as security for the financing, 

2.         The person, estate, or trust has not constructed , or acted as a contractor for the construction of, a residence on the property in the ordinary course of business of the person, 

3.         The person, estate or trust provides seller financing that meets the following requirements:

 a. The financing has a repayment schedule that does not result in negative amortization, 

b. The financing has a fixed rate or an adjustable rate that is adjustable after five or more years.
  
For more information, please feel free to review the following: http://combslawgroup.com/nscbf/

Richard Bazinet - Realty ONE Group - Phoenix Scottsdale Real Estate

Sunday, March 3, 2013

Are You A Renter?


If so, it’s time to put you into YOUR home. Even if you had a short sale, a foreclosure or a bankruptcy.

Why?

Ever thought how much you pay in rent over an extended period of time? Probably a lot more than you realize.  The amount you spend on rent could be applied to a mortgage, not only building equity in your own property [in the home you currently live or a different one], but – in most cases – substantially reducing the federal and state income taxes you pay each year.

And what happens with your rent money? It’s gone, no equity, no return. Zero. Zilch.

And you know what else?

Ø      Your mortgage payment may be lower than the rent you currently pay.

Ø      Home prices have increased by about 30% in 2012 in Maricopa County. If 2013 follows suit, then they will increase again at a similar rate or perhaps more. If you own, you participate in this equity growth for yourself – not someone else. If you rent, you don’t – you just pay the landlord’s mortgage and help the landlord build equity.

Ø      Monthly rental prices are also on their way up.

Ø      Mortgage loan interest rates are historically low for now – you may be surprised at what you can afford. But those rates will rise – that’s guaranteed. So time to lock-in while they are at lowest ever. A 1% rise in interest rates is the same as tens of thousands of dollars on the price of the home.

Ø      So who knows – perhaps your current landlord may even be interested in selling you the home you currently occupy.

I’m not a mortgage lender, so I’m not trying to sell you a loan. I’m a professional realtor, and I can help you acquire a home – that’s what I do. And I can recommend you to the best lender in the business to help you out in your particular situation.

To determine your home-buying ability, call or email me.  The consultation is free and confidential – no strings attached. There is no cost to get pre-qualified with my preferred lenders. So make the call today!

Can’t call? Go online and contact me here at http://goo.gl/HIcuw

Furthermore, if you are interested, you may order FREE online, my valuable consumer guide
7 Secrets For Savings Thousands When Financing Your Home. You can order it online and it can be postal-mailed directly to you or emailed right into your inbox. It’s automated; you don’t even need to speak to anyone. Just point your browser to http://goo.gl/HIcuw

There also a Free bonus in the report to get you started saving money right away.