Apple Realty RE Blog

Buying a Home: the Dangers of Seller Financing

Thu, 17 May 2012 12:04:22 -0400

Buying a Home: the Dangers of Seller Financing:

Trying to obtain a mortgage for buying a home today can be incredibly challenging even for those with good credit and it could become even more difficult before it gets easier. This has many home buyers turning to seller financing which can bring many benefits but also comes with its fair…

"No one ever grows up wanting to be a tenant."

Thu, 17 May 2012 11:35:17 -0400

“No one ever grows up wanting to be a tenant.”

BHC 0512 BVsigns 01 on Flickr. Via Flickr: Photo Earl...

Mon, 14 May 2012 11:20:37 -0400

BHC 0512 BVsigns 01 on Flickr.

Via Flickr:
Photo Earl Neikirk/Bristol Herald Courier

Bristol Virginia city council is working on the rules for signs around the City. The signage along Commonwealth Ave. is shown here.

Great Articles about Money

Mon, 14 May 2012 11:10:00 -0400

Great Articles about Money:

The Best of Freakonomics by Stephen J. Dubner and Steven D. Levitt - How to make it, why we steal it , how to bet with it, and how it motivates us. A selection of the best articles from NYT column that became an international sensation.

To Have is To Owe by David Graeber - A lot of people have little understanding of what money really is - if you want to find out, this classic article is the place to start.

Three great articles about the financial crisis by Michael Lewis - The world’s top financial reporter heads to Greece, Iceland and Ireland to find out how the credit crisis changed the world.

Jonathan Lebed’s Extracurricular Activities by Michael Lewis - Another classic Lewis piece about how a 15-year-old became the first ever minor to face prosecution for stock market fraud.

The Great American Bubble Machine by Matt Taibbi - “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

The $20 Theory of the Universe by Tom Chiarella - A beginner’s guide to bribery. Find out just how far greasing people’s palms with a $20 bill can get you.

Why the Poor Pay More by DeNeen L. Brown - “The poorer you are, the more things cost. More in money, time, hassle, exhaustion, menace. A primer on the economics of poverty.”

Inconspicuous Consumption by Virgina Postrel - What do the things you spend your money on say about you?

Is Free the Future by Malcolm Gladwell - The author asks whether the internet will make paying money for stuff a thing of the past.

Photo

Mon, 14 May 2012 11:04:15 -0400

Improving Your Credit to Qualify for a Mortgage Loan

Thu, 10 May 2012 12:05:26 -0400

An incredible number of Americans have suffered damaged to their credit scores in the last few years while lending standards for home loans have become increasingly tougher. This doesn’t mean that you should give up on buying a new home by any means. Begin rebuilding your credit now and you could see your credit scores rebound and be able to buy a new home and get a mortgage sooner than you think.

There may be nothing you can do about recent bruises to your credit but what you do from here on out can make all the difference in your financial future and that of your loved ones. Love it or hate it, your credit is likely the most valuable asset you have.

Good credit isn’t just about the negative items you have. Often it is a matter of not having enough good credit to outweigh the bad. Negative credit will eventually fall off your report but rebuilding your credit is likely going to require establishing new lines of credit.

The good news is that banks have recently reported relaxing credit standards for consumer loans and credit cards. Those who have been hit the worst may find applying for secured credit cards and loans or in-store financing the easiest route. Just make sure that you manage it wisely and don’t get further in the hole.

To establish enough new credit to qualify for a mortgage loan you will need at least 3-5 accounts. The length of time they are open and high credit limit are important too. Just don’t apply for too much credit or you’ll lower your credit score further.

If you are still coming up short know that some select mortgage programs will accept alternative credit. This means carefully documenting your rental payments and utility bills, not just with receipts but a paper trail showing how you paid them.

help East Tennessee win $1,000,000 towards fighting hunger in the area!!!!

Wed, 09 May 2012 09:47:03 -0400

help East Tennessee win $1,000,000 towards fighting hunger in the area!!!!:

growing-up-crazy:

Johnson City, TN is currently in second place in a contest to win $ 1 million towards fighting hunger in the area. Please PLEASE PLEASEEEEEEE vote and reblog this. Both things will take you less than 30 seconds total, and I will love you forever!!

Johnson City & Kingsport both on NAHB's 100 Improving Housing Markets

Wed, 09 May 2012 09:40:30 -0400

Johnson City ranks 82 & Kingsport 83 on May report put out by the National Asscoation of Home Builders listing Improving Housing markets in the nation.

Are You Really Ready to Buy a Foreclosure?

Mon, 07 May 2012 12:21:03 -0400

Foreclosure properties still offer huge discounts for home buyers looking for new residences, vacation homes and investment properties but are you really prepared for the potential work involved?

Recent figures from RealtyTrac show the top 10 states for foreclosure discounts compared to regular selling prices ranging from 47% in Louisiana to 36% in Georgia but these bargains often come with a price. Even $10,000 foreclosure homes can turn out to be teardown and new construction projects running up tabs well over $100,000.

It’s all about how much discount on the front end is worth the potential work lurking after closing.

Do you know how many tens of thousands of dollars it will cost to teardown a foreclosure if you find too many problems after you buy? How much more will it cost to rebuild?

Even if your work is limited to rehabbing properties or what appears on the surface to be a little clean up and cosmetic makeover how much can you handle yourself, do you have enough cash reserves to account for overages and carry the overhead?

This all means cash money out of pocket unless you are using an FHA 203 (k) rehab loan, Fannie Mae HomePath financing or qualify for another type of rehab mortgage loan.

Make sure conduct thorough inspections and get multiple quotes from contractors. If you plan to resell after fixing up your foreclosure you need to know the ‘subject-to’ value or ARV, as well as which improvements will yield the best ROI and increase the actual appraised value.

If buying a home as a residence or rental property is it wiser to just buy a home which has recently been remodeled and be able to finance the improvements and enjoy the peace of mind of a brand new property look, feel and smell?

What determines real estate market recovery

Wed, 25 Apr 2012 12:22:12 -0400

by Allan Weiss

The National Association of Realtors’ chief economist was recently quoted as saying that the recovery is happening though not at a breakout pace.

My problem with this statement is that it is very hard to accurately generalize about this market. The dynamics are a complicated mixture of pervasive economic forces and locally specific forces. For example, interest rates tend to very similar across all US markets. This is also true of mortgage underwriting policies government tax breaks and the general mood of the economy. To some degree, it is also true of the strategies of the large banks regarding what to do with their distressed properties. If a national bank has a policy to aggressively market and sell foreclosed properties, this can affect many markets across the US.

However, bank policy about foreclosed properties is also where individual market dynamics begin to come into play. The concentration of distressed properties varies quite a bit by local market and depends on where people were most economically hit during the worst of the recession, where people tended to refinance and take out equity and where there was a high level of purchasing at or near the peak. You can see how these rates have varied with this heat map.

Ultimately, price is determined by our old friend supply and demand. The variables that go into supply and demand these days include how many foreclosed properties are on the market, how many other properties are on the market and how many qualified buyers are actually bidding on properties. However, supply and demand does not complete the picture as well as it has in the past. This is due to so called “shadow inventory”, meaning the number of properties that are or will be in the banks’ hands that have not yet hit the market. If the banks flooded the market with these properties, prices would sink like a stone. This is why its not nearly the whole story to talk about a “recovery”. There cannot be a deep recovery until these properties once again are owner occupied. This could be a long way off.

4 Real Estate Investors Mistakes to Avoid

Tue, 24 Apr 2012 15:41:00 -0400

Investing in real estate can be incredibly profitable but it can also be frustrating for real estate investors who rush in to wing it without getting the right real estate education and not knowing where the pitfalls lay.

Watch out for these 4 common killer mistakes real estate investors make…

1. Underestimating Property Management

Becoming a landlord may be way better than any job you have had before and owning rental properties may pay a lot more. However, this doesn’t mean being a landlord is stress free or fun. At some point you are going to want to hire a property manager. Plan ahead and factor this into your cash flow so it doesn’t bankrupt you later.

2. Not Addressing Maintenance Issues Promptly

Dealing with repairs can be a pain and it is often tempting for real estate investors to skimp where they can to maximize cash flow today. Unfortunately, this often comes back to bite you. The problems can quickly expand and become far more costly than if dealt with right away and constant patching versus replacing just means wasting more money in most cases. Don’t let deferred maintenance drag you down.

3. Not Carrying Proper Insurances

No one loves having insurance and we all know that it rarely pays out as much as you want, when you want it to. However, this is not something for real estate investors to skimp on. Even if you don’t take out a mortgage and aren’t required to have it, it could save you big time later. This applies to both title and hazard insurance. Remember, protecting your capital and equity must be your first concern.

4. Not Accounting for All Closing Costs

As with all things in life, closing costs are generally always more than you hoped or expected and your net paycheck is less. A few dollars or even a few thousand dollars may not sting most of the time but being careless with your math can quickly put you in the hole and lumber you with dead weight properties you can’t get rid of.

moneyisnotimportant: Almost Half of Americans Give Themselves...

Tue, 24 Apr 2012 12:21:56 -0400

moneyisnotimportant:

Almost Half of Americans Give Themselves Low Grades for Financial Literacy

42% of Americans give themselves a grade of C, D or F when it comes to personal finance, according to the 2012 Consumer Financial Literacy Survey from the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association. That’s up from 35% in 2010, and it suggests that the enduring slow economy is leading to some cathartic moments in millions of households.

On the bright side, they’re totally crushing it when it comes to spending money they don’t have.

"The American people still view homeownership as their best potential long-term investment, as a..."

Tue, 24 Apr 2012 11:27:39 -0400

““The American people still view homeownership as their best potential long-term investment, as a symbol for their personal success and as one of the most important goals of their lives.””

- NAHB CEO Jerry Howard in The Hill (via nahbhousekeys)

New Homes are Less Expensive to Maintain

Mon, 23 Apr 2012 15:42:26 -0400

New Homes are Less Expensive to Maintain:

April is new homes month. And one of the virtues of a newly constructed home is the savings that come from reduced energy and maintenance expenses.

Data from the 2009 American Housing Survey (AHS) offer proof. The AHS classifies new construction as homes no more than four years old.

For example, for routine maintenance expenses, 26% of all homeowners spent $100 or more a month on various upkeep costs. However, only 11% of owners of newly constructed homes spent this amount. In fact, 73% of new homeowners spent less than $25 a month on routine maintenance costs.

Similar findings are available for energy expenses. On a median per square foot basis, homeowners spent 78 cents per square foot per year on electricity. Owners of new homes spent 65 cents per square foot per year.

For homes with piped gas, homeowners spent on average 53 cents per square foot per year. Owners of new homes spent 38 cents per square foot per year.

These data highlight that a new home offers savings over the life of ownership due to reduced operating costs. This is one of the many reasons that the current system of appraisals needs updating to reflect the flow of benefits that come from features in a new home.

Should I Prepay My Mortgage?

Mon, 23 Apr 2012 12:21:10 -0400

You’ll typically hear two different arguments here, and I’ll sum them up quickly without getting into the math:

1. You shouldn’t prepay your mortgage. You should invest the money instead because with loan rates so low, it’s feasible to outpace the interest rate with your return. Plus, your mortgage is a tax deduction.

2. You should prepay your mortgage. You’re guaranteed to save money over the long-term, whereas funds that are invested could actually lose value. Even though you’re reducing your tax deduction, you’re still guaranteed to come out ahead.

Most people with a lower risk tolerance fall into the second group. However, there’s one thing to consider that many people overlook…

Once you use funds to prepay your mortgage, that money is inaccessible until you sell your home or take out an equity loan (which you’ll be charged interest on, of course). In the event that you lose your income, the fact that you’ve prepaid your mortgage is of no use to you. Your mortage company will still want the regular monthly payment, and you’ve got to keep the lights on and the water running. The last time I checked, the electric company still won’t accept bricks from your home’s exterior as a payment. It is much easier to sell something that is conservatively invested than it is to sell your home and find a new place to live.

But, does that mean you shouldn’t prepay your mortgage? Not at all. What I’m suggesting is that you find some balance here. Instead of going all one way or the other, considering sending in a small amount of extra cash to pay down your mortgage a little faster, and put the rest somewhere that is easier to get to in the event that you need it.

“Occupied, Unoccupied, Preoccupied”

Sun, 22 Apr 2012 15:39:09 -0400

“Occupied, Unoccupied, Preoccupied”

Companies to pay $14.8M in FEMA trailer settlement

Sat, 21 Apr 2012 14:01:14 -0400

Nearly two dozen companies that manufactured government-issued trailers for storm victims after Hurricane Katrina have agreed to pay $14.8 million in a proposed class-action settlement of claims that the temporary shelters exposed occupants to hazardous fumes.

Plaintiffs’ Gerald Meunier said Tuesday that the agreement could benefit tens of thousands of Gulf Coast residents who lived in travel trailers provided by the Federal Emergency Management Agency after hurricanes Katrina and Rita in 2005.

Meunier said 21 trailer makers or their insurers will pay to resolve the claims without any admission of wrongdoing.

A court filing Friday asks U.S. District Judge Kurt Engelhardt to give his preliminary approval to the deal, which would be the largest mass settlement of claims over formaldehyde levels in FEMA trailers so far. The chemical, commonly found in building materials, can cause breathing problems and is classified as a carcinogen.

Dave Ramsey on Buying a Second House Before Selling Your First

Fri, 20 Apr 2012 18:23:18 -0400

Dave Ramsey on Buying a Second House Before Selling Your First

"When it comes to buying and selling homes, locking mortgage rates and the like, people who have zero..."

Tue, 17 Apr 2012 12:09:30 -0400

“When it comes to buying and selling homes, locking mortgage rates and the like, people who have zero financial credentials and can barely balance their checkbooks seem, for some strange reason, to believe that they can and should make moves timed to always sell at the top and buy and lock in their interest rates at the very bottom.”

- Tara-Nichole Nelson

"Our houses are such unwieldy property that we are often imprisoned rather than housed by them."

Mon, 16 Apr 2012 14:47:00 -0400

“Our houses are such unwieldy property that we are often imprisoned rather than housed by them.”

- Henry David Thoreau