How to use FHA Loans to Invest in your Current Home

Making improvements to your home is an easy way to raise its value. With a FHA loan you could be able to include the costs associated with your home improvements with your loan. The Department of Housing and Urban Development’s 203 (k) program is one in which you can refinance your current home or even purchase a new one in need of improvements and include all costs in the loan.

Aside from being able to use it to invest in your new or current home, there are numerous advantages to using a FHA loan. First and foremost is the ease with which one can qualify for a FHA loan as opposed to more traditional types of loans. Because the FHA is simply guaranteeing your loan lenders will be more inclined to give you the loan you need to refinance your home. This means that lenders have considerably less to lose by extending you a loan, because if you do go into default and they do have to foreclose they will get their money back.

Another reason FHA loans are easier to get is due to the relaxed requirements. Good or perfect credit is not required by the FHA for one of their backed loans, which makes it a strong alternative to traditional loans, especially since typically predatory lending practices have come under increased public and political scrutiny.

Two more advantages of a FHA are the lower interest rates, which translates directly to no or low down payments. The lower interest rates means your monthly payments will be considerably lower. So much so that you can afford to finance more of the home and pay less in the down payment. Sometimes you can even finance the entirety of the home and won't need a down payment at all.

For more information on FHA loans and how they can help you invest in your new or current home visit HUD’s website or this handy FHA Mortgage Guide I spotted on MortgageLoanPlace.com.

The Advantages of Buying Single-Family Homes

Nearly 80% of all real estate transactions take place in the lower — middle range of house prices. Specifically, the average home in this range is a three-bedroom two bathroom house with a carport or garage and approximately 1100 sqft. Why are these bread and butter houses such hot sellers? Because they are the transition houses for people moving up and down the financial ladder of life. They are usually the starter homes for up-and-coming couples and are the lifelong homes for the blue-collar backbone of America.

This area of real estate investing has several advantages. First, these units represent the bottom end of the housing market. The sale prices are low, the down payments are usually low, and the demand is high. These homes can be diamonds in the rough. By putting in some minimal fix up and cleaning, you can resell them at a fantastic profit.

An example would be somebody like John who buys single-family homes around $200,000 and renovates them. After he fixes up the homes he rents them out at an excess of $1850 per month. If you run the numbers, these homes are cash flow positive and slowly paying down John’s monthly mortgage. Now John can either hold onto the single-family homes and benefit from the rental income stream or you can try flipping a single-family home to other investors and make a profit.

A New Way To Sell Your House - Bury St. Joseph In Your Yard

Are you religious (or not) and looking for a new way to speed up the process of selling your home? If so, you may want to try what one person did to help sell her home during this difficult real estate market. She has turned to an unlikely source for help: St. Joseph.

St. Joseph is a Catholic saint who has long been believed to help with home-related matters. And according to lore now spreading on the Internet and among desperate home-sellers, burying St. Joseph in the yard of a home for sale promises a prompt bid. After she and her husband held five open houses, even baking cookies for one of them, she ordered a St. Joseph “real estate kit” online and buried the three-inch white statue in her yard.

These statues are flying off the shelves as an increasing number of skeptics and non-Catholics look for some saintly intervention to help them sell their houses. Talk about desperate measures. You might as well put your house up on eBay and/or Craigslist and see if anyone makes a bid.
~~~~~
Update: Her house has sold! Congrats to her and, apparently, burying St. Joseph in her yard helped.

Last Week's Activity

Paradise

New Listings 17

Pending 11

Magalia

New Listings 8

Pending 4

Figures provided by the Sierra North Valley Multiple Listing Service.

Tammy Vertrees "Always Moving" #1 on the Ridge in Sales! 530.554.4483 530.872.5428 www.tammyvertrees.com Visit my website for FREE Reports!

5 Powerful Buying Strategies

5 Secrets to Buying the Best House for Your Money

1. Get "Pre-Approved" - Not "Pre-Qualified!" Do you want to get the best property you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one element in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller. In years past, I always recommended that buyers get "pre-qualified" by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you "pre-qualified" and issues a certificate that you can show to a seller. Sellers are aware that such certificates are WORTHLESS, and here's why! None of the information has been verified! Many times unknown problems can come to the surface! Some of the problems I've seen include recorded judgments, alimony payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the clients' bank account long enough, etc. So the way to make the strongest offer today is to get "pre-approved". This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It's VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.

2. Sell Your Property First, Then Buy the House. If you have a house to sell, sell it before selecting a house to buy! Contingency sales aren't nearly as strong as one that comes in with a ready, willing and able buyer. Consider this scenario: You've found the perfect house - now you have to go make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller figures that this is a risky deal since he might pass up a buyer who DOESN'T have to sell a house while he's waiting for you. So he says OK, he'll do the contingency but it has to be a full price offer! You have now paid more for the house than you could have because of the contingency and you have to sell your existing house in a hurry! Otherwise; you lose the house! So to sell quickly you might take an offer that's lower than if you had more time. The bottom line is that buying before selling might cost you THOUSANDS of dollars.

3. If you're concerned that there is not a house on the market for you, then go on a window-shopping trip. You can identify possible houses and locations without falling in love with a specific house. If you feel confident after that then put your house on the market. Another tactic is to make the sale "subject to seller finding suitable housing". Adding this phrase to the listing means that WHEN YOU DO FIND A BUYER, you will have some time to find the new place. If you don't find anything to your liking, you don't have to sell your present home. Play the Game of Nines Before house hunting, make a list of things you want in the new place. Then make a list of the things you don't want. You can use this list as a guide to rate each property that you see. The one with the biggest score wins! This helps avoid confusion and keeps things in perspective when you're comparing dozens of homes. When house hunting, keep in mind the difference between "STYLE AND SUBSTANCE". The SUBSTANCE are things that cannot be changed such as the location, view, size of lot, noise in the area, school district and floor plan. The STYLE represents easily changed surface finishes like carpet, wallpaper, color and window coverings. Buy the house with good SUBSTANCE because the STYLE can always be changed to match your tastes. I always recommend that you imagine each house as if it were vacant. Consider each house on its underlying merits, not the seller's decorating skills.

4. Don't Be Pushed Into Any House. Your agent should show you everything available that meets your requirements. Don't make a decision on a house until you feel that you've seen enough to pick the best one. A decade ago, homes were selling quickly, usually a few days after listing. In that kind of market, agents advised their clients to make an offer ON THE SPOT if they liked the house. That was good advice at the time. Today there isn't always this urgency, unless a home is drastically underpriced and you'll know if it is. Don't forget to check into the SCHOOL DISTRICTS of the area you're considering. Information is available on every school; such as class sizes, % of students that go on to college, SAT scores, etc. You can get this information from my web site.

5. Stop Calling Ads! Please note - ads are sometimes created to make the phone ring! Many of the homes have some drawback that's not mentioned in the ad such as traffic noise, power lines, or litigation in the community. What's not mentioned in the ad is usually more important than what is. For this reason, I want you to be very careful when reading ads. Remember that the person writing the ad is representing the seller and not you! The most important thing you can do is have someone on your side looking out for your best interests. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer's broker. Then you become a client with all the rights, benefits and privileges created by this agency relationship and you're no longer just a shopper. Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER? These "great deals" go to those people who are committed to working with one agent. When an agent hears of a great buy, who do you think he's going to call? His client, who he has a legal obligation to work hard for "you", or someone who just called on the phone and said "keep your eyes open"? So to get the best buy on a property, I always recommend that you hire your own agent and stick with him or her.

Thanks for visiting!

A Good Time to Buy a House if You Can Afford One

Tammy Vertrees "Always Moving" #1 on the Ridge in Sales! 530.554.4483 530.872.5428 www.tammyvertrees.com Visit my website for FREE Reports!

Finally, it's a buyer's market out there.
For years rapidly rising prices kept many first-time home buyers out of the housing market. But as home values slide further downward and interest rates hover at relatively low levels, it may be time to start looking to buy that first house.

That is, if you have a secure job, can afford higher down payments than were required a few years ago and can meet lenders' much stricter income and credit requirements.

"Lenders aren't cutting everyone off. They're reverting to sanity after years of making bad loans," says Dick Lepre, senior loan officer at Residential Pacific Mortgage, in San Francisco.
The U.S. median home price was $201,000 in January, down 4.6% from January 2007. The S&P/Case-Shiller national home-price index for the fourth quarter was down 8.9% from a year earlier, the biggest drop in its 20 years. Prices have plunged 10% to 12% in troubled markets like Florida and California, and many economists predict an overall slide of 20% or more before the housing market bottoms.

There was a 10-month supply of existing homes for sale in January, up from just under five months during boom times.

If you are about to get into the housing market, this is all good news. But before you begin visiting open houses, recognize that the old home-buying rules no longer apply. You want to approach buying your first house with a financially realistic point of view.
Remember: You're investing in a place to live, not speculating in the stock market or even putting money into a savings account. So keep it simple. Buy smarter. Buy cheaper.
Determine what you can afford. "The days of easy money are over,". Mortgage lenders have tightened their standards and are requiring larger down payments. Typically, they want buyers to spend no more than 28% of their gross monthly income on mortgage payments, real-estate taxes and home insurance.

Be sure you also have cash for closing costs like legal fees and title charges. The total typically reaches 2% to 3% of the house price, but differs by state and mortgage product. Also be prepared to pay for moving expenses and ongoing maintenance.

Know your market. Gone are the days of "sure thing" home purchases when buyers would bid up prices and then watch the values of their houses soar like tech stocks in 1999. Today, if buyers are bidding at all, they're far more likely to insist on lower prices and to walk away if they don't get what they want.

Now more than ever, location is crucial, down to the neighborhood and street level. Focus on good school districts, crime statistics and any impending construction or public works that could increase or decrease the value of a home. Conduct preliminary research online at Web sites like Zillow.com, Trulia.com and greatschools.net.

"Eighty percent to 90% of housing prices can be explained by what's happening in local economies. Take a hard look at job growth and neighborhood conditions,". Make your dollars count. Although conditions vary by market, look for a home that is significantly lower than its 2004 price. (You can ask me for information and check estimated historical values at Zillow.com.) "From the peak to trough, home prices in some markets will drop 35% to 40%,".

Consider what it would cost to buy land and build a comparable structure. Insurance companies can provide general cost estimates, but for a thorough assessment consider hiring an appraiser (search online by zip code at AppraisalInstitute.org).

Also compare your estimated monthly costs for the mortgage, taxes and other expenses with the cost of renting a similar place nearby. If you can rent virtually the same house for a much lower cost, the seller is asking too much.

Builders, sellers and banks are eager to unload unoccupied houses, giving the buyer more leverage to ask for lower prices or incentives. And don't overlook REOs ("real estate owned" properties) held by lenders.

Buy for the long haul. "Most first-time home buyers don't buy the house they're going to end up in," But experts suggest that in a downward market, people should purchase a home only if they intend to live there for seven to 10 years.

"Historically, housing bubbles have taken several years to deflate, but it's hard to tell if we'll see prices drop a lot in the next two or three years or see moderate drops over the next 10 years".
If you're not planning to stay in the house for long, "it may be wise to watch from the sidelines."

In my opinion, prices can't get much lower. I would start buying or investing now before you miss the bottom!

Make Money Flipping Real Estate - Two Ways

Of course you can make money flipping real estate in more than two ways. But when it comes to actually repairing and improving a house, there are two different approaches that are very different. You can do do as much of the work yourself as possible. That’s one approach. The other? Manage the project while others do all the actual repairs and other work.

Some investors will say that your time should be spent finding and managing properties, not painting or hammering nails. Otherwise you’ve bought yourself a job, they will tell you, rather than an investment. Although I tend to agree with that idea, nothing is that simple and definite. You can make money flipping real estate either way, and there are reasons for both approaches.

Doing It Yourself
A question: Do you make more money or less money when you do your own work? It depends on how you look at the matter. You might make more money on a given project. If, for example, it costs $3,000 in labor for roofing, and you do it yourself, you can make $3,000 more profit - if you work as fast as the professionals would have (there are holding costs to pay if you’re slow). But if you do a lot of the work yourself, you might flip just a couple houses a year, rather than the dozen you could do if you paid others to do the work.

What you do get working on your own, is a bigger margin of safety. At least you CAN get a bigger margin of safety, but those of us that aren’t as skilled in the building trades might screw things up and have to hire a professional afterwards. On a house with a projected $20,000 profit after paying for labor, you might save $8,000 by doing much of the work on your own. More profit perhaps, but it also means that if there are unexpected expenses or you guess wrong on what the house will sell for, you’re less likely to have a loss.

You might also consider your cash situation. If you don’t want to bring in other investors, can’t borrow enough money, and don’t have much capital, you can get by with less by doing a lot of the work. You could even live in the home while you fix it up. It’s easier to get financing, and if you stay there two years before selling, you don’t have to pay taxes on the capital gain.

Flipping Real Estate As A Business
As a business, there is no doubt that you have the opportunity to make more money paying for help. An investor I know flipped fourteen houses one year, something he never could have done if he had been painting the homes or laying linoleum. He never got dirty, and he made it clear that he thought his time was better spent finding the next deal, while his crew finished the houses that he was flipping.Your Choice...

What’s the best approach? Well, there is more money to be made finding deals than hammering nails, but what if you need a safe small deal to get going? What if you’re short on cash and can’t borrow much? Finally, what if you enjoy the process of fixing up houses?

They are all good reasons to do the work yourself, or at least some parts. The bottom line is that there is no absolute right way to make money flipping real estate.Changing ways is natural too. After all, investors can investors learn a lot by getting involved with the renovation work. That kind of experience might mean that you save money and make better decisions later, when you are just finding deals and letting others do the work. In any case, the choice is yours.

Foreclosure Timeline - How Long Does it Take?

In general, the mortgage company will start the foreclosure process about 3-6 months after the first missed mortgage payment. Even though they can start it after the loan is technically in default (after 30 days late), lenders understand that many homeowners face short-term financial hardships and will be able to get back on track quickly. If the homeowners are keeping in contact with the bank, working out a repayment plan or trying to sell, they may postpone the actual foreclosure filing for a number of months, depending on the success of the homeowners. The mortgage company will want to give their clients some extra time to pay the loan back if the lines of communication are open. Of course, if the homeowners do not call the bank and ignore the phone when the lender calls to find out why they are not making the payments, then the foreclosure will begin much earlier.

Generally, a few weeks to a few months after the foreclosure is filed, the sheriff sale will be conducted at the county courthouse. Again, homeowners can get this postponed for a while, if they are working on a solution to save the home. Keeping in contact with the bank, letting them know how the process is going, and asking for more time if it is needed are all actions that foreclosure victims can take to prevent losing the home at a hastily scheduled foreclosure auction. The homeowners will have to put something in writing to the bank to show what they are working on, but postponing a sheriff sale can be quite simple. All it takes is communicating with the bank and working on a solution to the problem.

Now, after the sheriff sale, there are two possibilities, depending on the state foreclosure laws. First, the eviction process may begin right away. If this is the case, it can be another 2 weeks to a month or so between the sale date and the eviction date. The bank will have to ask the court for possession, the court will have to confirm the sale and order the county sheriff to evict the former homeowners and change the locks. But this is not a one-day process, with the sheriff kicking out the homeowners a few hours after the auction. Homeowners will still have a small amount of time to plan their future, find a new place to live after foreclosure, and move items out of the house.

The second possibility is if the state law allows for a redemption period, which is extra time after the sale that homeowners can work to keep their homes. During the redemption, they can try refinancing, selling, or paying the loan in full some other way, and keep the home in their names. After the end of redemption, though, the eviction process will start and it will be a few weeks after that that the sheriff shows up to remove everyone. But, if homeowners are unaware of the extra time they are given by state law, they may move out of the house before they have to. Redemption periods can be used by homeowners to begin a savings plan, pay off other debts to improve their credit, or begin to recover financially in other ways.

Without having the relevant information to understand how long the foreclosure process will take, many homeowners make mistakes that could otherwise be avoided. They may believe they have to move out before it is necessary, crippling their ability to start repairing their financial lives. Or, they may think that they have a lot of time left because of faulty assumptions about when the bank will start the foreclosure process, which can leave them staring at a sheriff sale before they even know it has been scheduled. Knowing how long foreclosure takes, and understanding that it is conducted differently in each state, is some of the most important advice that homeowners can receive, and will allow them the greatest chances to save their homes.