Hampton Roads Real Estate

Over the last couple of weeks, interest rates have began to creep up slowly from the low historic mortgage rate of 4.5% to roughly 5%. Rates have been at or around all time historic lows for the last couple of years, and many economic gurus are saying that’s all over with.

Over the last year, with the trillions of dollars spent on stimulus, bailouts, and wasteful spending, our deficits have soared to historic levels. No time in American history, have we had such large deficits in spending. Add a contracting economy into the picture, and the unwillingness of foreign investors to continue to buy American bonds, and it can become a devastating picture for interest rates and the economic soundness of the country.

Many top economic officials are anticipating our financial situation to get a lot worse before it gets better, the consensus is that we need to quit spending and nationalizing our companies like the banks, auto makers, and healthcare, which will cost even more and make our deficits even larger. Talk has been made that our AAA credit rating could be devalued, which in turn, would make loaning money more expensive. As we can all remember, back in the early 80’s, interest rates soared to levels of 21%. Can you imagine paying 21% on a home mortgage? Especially with the housing market in the condition it is, it would be devastating. Many are projecting the rates to climb over the next year or two to levels not seen since that time. There are many factors involved, but worst case scenario, we could reach or exceed those levels in the 1980’s. Some are projecting interest rate levels to reach 10%-15% within the next couple of years.

I cannot stress the urgency of taking advantage of the low rates while they are still available. If you are in an ARM or Interest Only loan program, do everything you can to refinance before rates shoot up. If your looking to purchase a property, you couldn’t pick a better time. Rates are still low, there are plenty of available properties, and negotiating a good deal has never been easier. For more information on this topic, please visit JoshSellsVirginia.com.

One of the least known methods for getting some of the necessary funds to put down on an investment property is a self directed IRA. It has been available for use since 1974, and is an excellent way to come up with the capital to get some of these bargains available.

With most bank owned or foreclosed properties selling for dimes on the dollar, this is the time for investors that have some cash tucked away to really make some profits, especially if you plan to hold for longer term. If an investor can come up with 30%, there are several lenders that will assist you in making your IRA work for you.

Essentially, using your IRA for the down payment does not physically take the money out of the account, you mearly borrow against it or secure the property against the IRA. The benefits of going this route is that over time, the real estate market has out performed the stock market. Real Estate markets typically run on decade swings, whereas the stock market can take decades to return to the peak high.

Another plus of using your IRA to purchase property is that it will generate a monthly cash flow that you can put into your IRA, mutual funds or any other investment your looking at. Over a 10 to 20 year period of funneling your cash flow back into the stock market or other investments will just be icing on the cake.

Once you decide to sell the property, the proceeds you make will be rolled back into the IRA, so once again, you have not taken out anything from the account, and when you sell, all the profit you’ve made from appreciation and loan pay down will be added to your IRA tax free with no capital gains tax.

The biggest benefit for investing in property vs. stock shares in a company is that real estate is a tangible asset that you can control vs. remotely owning shares in a company that you have no control over.

For more info on this topic or to get some of the available lenders that work with these types of deals, please contact me at JoshSellsVirginia.com.

Foreclosureshave become more and more prevalent across the country, including right at home here in Hampton Roads, Virginia. In the first three months of 2008, foreclosed homes were about 4.17% of all residential sales. Short Sales, REO’s, and bank owned properties were accounted for in that analysis.

In 2009, for the same quarter as 2008, foreclosures nearly quadrupled to 17.7%. The cities of Virginia Beach, Norfolk, Chesapeake, and Newport News made up the majority of that figure by having 75% of the foreclosures in our local market.

In the month of March of this year 2009, 16.6% or 190 sales were contributed to foreclosed sales. That’s higher than the first quarter of 2008, as there were only 171 distressed home sales.  Virginia Beach, Norfolk, Chesapeake and Newport News made up 68% of the foreclosure sales in March of 2009.

Foreclosures are the first step for us to have normalization in our markets. It’s a positive sign that they are being purchased and that the inventory is moving. With many buyers trying to find the right deal, there is something for everyone, whether your a first time home buyer, or an investor. There has not been a better time to purchase, interest rates are low, the inventory is high, and there are some fantastic deals. For more info on foreclosures or to contact me in reference to helping you find the right deal, visit JoshSellsVirginia.com.

All across the country, we are experiencing an overload of bank owned and foreclosed homes on the market for sale. With that saturation of listings for sale in an already slower market, it makes it harder to sell a home. It also gives great benefit to buyers looking for great deals, as usually they are offered at bargain prices. We have seen a national rise in these types of sales as they are giving some of the better deals and squeezing out a lot of home owners who are just trying to get their home sold!

Nearly 20% of homes sold in 2008 were REO sales. Short Sales made up an additional 11%, in which the home owner owes more than what the house is worth. In certain areas of California, almost 54% of all transactions were foreclosures and nearly 3% were short sales.

With these new opportunities available to take advantage of, keep in mind that there is more due dilligence required with inspections and financing, as well as making sure you understand the banks terms and required waiting time as with short sales. If you patient and accepting of the red tape associated with these deals, you will great a great home at a great price.

For more information on these type of deals or to view foreclosure listings, please visit JoshSellsVirginia.

Many investor clients of mine have inquired about obtaining financing for investment property amidst the financing turmoil that we’ve been experiencing for the last year. Many investors have had to become very creative in getting the financing they need to continue making money in a down market.

There are so many fantastic dealsout there currently, the only problem is that money is now a lot tighter than it used to be. There are however, other means to achieve the goals your looking for and get the money needed for financing to make money by buying and holding, or buying to fix and sell.

As of now, lenders are requiring between 10%-25% down on any conventional investment loan program, depending on credit scores, type of property (multi family or single family), and condition. Here are some of the options currently available:

The easiest way to still obtain financing would be to have a line of credit established on a property owned that has available equity, lenders are still allowing for line of credit to be used for down payment. With that, you will be able to get a conventional loan product and take advantage of the lower interest rates.

Another common way to get around the downpayment obstacle would be to ‘borrow’ against your IRA, 401k, and some insurance policies to get the necessary down payment. Just make sure that you PAY yourself back from your intended investment. Borrowing money to leverage is a great plan, but also to have an exit strategy on paying yourself back is crucial.

If you don’t currently own a home, or if you would like to buy a property to live in and rent out your current home, there are some available loan programs such as the FHA 203k program that is essentially a rehab loan for owner occupants to help assist you. The caveat is that you must intend to occupy the property, and lenders want to see at least 6 months to a year that you have occupied. There are restrictions for the FHA 203k on loan amounts and guidelines, so ask your local lender for the details. Intending to occupy is a great strategy for younger investors, such as military who want to purchase multi family property such as duplexes to quads and live in one unit for the required time line and rent out the other units.

Lastly, if it doesn’t appear that any of the strategies will work for your situation, there are some great alternative financing options out there that are available. They are commonly referred to as hard money loans, but with the difficulty of obtaining a conventional loan product, and the demand for investment financing, they have actually loosened up considerably and have made this option very feasible for many investors, especially the rehabbers out there. You will have a higher interest rate, and more costs on the front end, but some of these loans are essentially 100% financing, and once completed, you can possibly look at a refinance or selling it to get out of the current loan. I have some great contacts for alternative financing, so if you think it will be a good suite or are interested in knowing more, please don’t hesitate to contact me anytime.

To get more info on this topic or to contact me, please visit JoshSellsVirginia.com.

With Short Sales becoming more and more prevalent in our marketplace and around the country, I want to discuss the ins and outs of these types of properties so buyers and sellers will have a better understanding of what they are facing.

Short sales essentially are pre foreclosure deals. Rather than letting the property go into foreclosure, sellers are negotiating with their respective lender to abort the foreclosure process and agree to allow to sell the property for a loss. Lenders will entertain the short sale process if there has been evidence of hardship, due to loss of job, or any event that would cause the mortgage to go unpaid. Lenders would rather take a loss on the short sale vice having it go into foreclosure and paying legal fees, taxes, insurance, repairs, and still getting less than what they have invested. All in all, it’s a win-win for all parties.

For buyers out there looking to purchase a short sale, you must understand that there is a lot of red tape associated with these types of transactions. First and foremost, everything in the offer is subject to lender approval. Essentially meaning that the listing price of the property is not guaranteed, and that once you submit your offer, the lender can still come back and say they want more due to their bottom line amount. Another issue when dealing with these types of deals is that there are long waiting times on negotiations and approval. I have seen these periods go from two weeks to four months. So if your in a rush to be in your new home, this is definitely not the way to go. Be prepared for the unexpected, and make sure that any repairs needed on the property are listed on your initial offer, trying to negotiate after the fact is even more difficult.

For home owners out there that are behind on mortgage payments, this may be an option for you. First and foremost, don’t ignore the mortgage companies calls, I know that you don’t want to speak to them, but you must or it could make matters worse. Ask them if a short sale process would work for your situation. Find a good Realtor to help you with the process of negotiating with the lender and getting all the necessary documents you need. List the property on the market for sale at a competetive price, and hope that you receive an offer in a reasonable time frame. Most lenders will not start the short sale process until an offer is received, which is why it takes long amounts of time for the negotiation and approval process. There are companies available to help in the process of getting the short sale approved and moving forward. One company I recommend is Advance Short Sale Service in Virginia Beach. They will work hand in hand with your Realtor to make sure foreclosure is aborted and the sale of the home guaranteed.

Yet another price reduction to make this home sell fast. Currently priced at 119k, this home is priced about 40k below market value. Property is in excellent condition and ready for new home owner to move in. Excellent water views from the master bedroom and sits on the lake. To get more info on this listing, or any of my other listings, please visit JoshSellsVirginia.com.

Virginia Realtor® for Virginia Beach Real Estate, Chesapeake Real Estate, Norfolk Real Estate, Portsmouth Real Estate, Hampton Real Estate, Newport News Real Estate.

Another price reduction! This is a huge home in Virginia Beach with almost 2400 sq/ft. 4 beds, 2.5 baths, 2 car garage and priced to sell. Reduced price from $299k to $269k. Does need some TLC, but priced right for this size of home. To get more info on this listing, or any of my other listings, please visit JoshSellsVirginia.com

Virginia Realtor® for Virginia Beach Real Estate, Chesapeake Real Estate, Norfolk Real Estate, Portsmouth Real Estate, Hampton Real Estate, Newport News Real Estate.

I am excited to announce that we have just reduced price on an excellent investment property in Olde Towne Portsmouth on 420 County St from $269,900 to $199,900. That is a huge reduction in price and is priced for a very quick sale. To get more info on this listing, or any of my current listings, please visit JoshSellsVirginia.com.

 Virginia Realtor® for Virginia Beach Real Estate, Chesapeake Real Estate, Norfolk Real Estate, Portsmouth Real Estate, Hampton Real Estate, Newport News Real Estate.

This is another excellent opportunity to purchase this townhome well below market value. It sits on the lake and has excellent water views and is in great condition. Featured 3 bedrooms, 2.5 baths and has 1512 sq/ft. Marble tiled kitchen, central heat and air, and very centrally located in Virginia Beach. For more information on this listing, or any of my other listings, please visit JoshSellsVirginia.com.

Specializing in Hampton Roads Real Estate

Virginia Realtor® for Virginia Beach Real Estate, Chesapeake Real Estate, Norfolk Real Estate, Portsmouth Real Estate, Hampton Real Estate, Newport News Real Estate.