Brian Ripp

Foreclosures and bank REOs are pulling a new wave of novice investors into the market, some of whom are just a little clueless.

They see the price and they say, wow! I can buy that house and turn it into a rental. But they don't understand the local market, they don't understand landlording, and don't even necessarily visit the property.

What are some of the key rules for freshman class investors?

Number one: Due diligence is never optional. You've got to understand the local market - and that includes not just where prices are headed, but specific market demand for rental real estate in this price segment, and even the local government's plans for the area where you're thinking of buying.

Number two: Buy with a written plan - that's right, just like the large professional investors use, with an entry strategy and an exit strategy. How long are you going to hold onto the property, how much will it earn you during your period of holding?

And what's the endgame - a sale to another investor? Conversion to condos? Tear it down and build something that's closer to the underlying real estate's highest and best use?

Write it all down, that way you can analyze it better.

Number three: Calculate the actual costs of the property in advance - not just the bargain basement price, but how much you'll need to fix it and feed it - the management costs, rental commissions, vacancy costs, taxes, to name just a few.

If you don't know these things up front you are flying blind. And there are few good surprises in real estate.

Brian Ripp, CRS, GRI, Broker - your Bay Area Realtor

www.BrianRipp.com serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.

Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp

The U.S. House of Representatives today voted 403 to 12 to extend and expand the home buyer tax credit. The bill passed the U.S. Senate late yesterday and now will go to President Obama for his signature, where it is expected to be signed this week.

The tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a credit of up to $6,500. Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years. The bill also will increase the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit, provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

information from and w/permission from C.A.R.

Brian Ripp, CRS, GRI, Broker - your Bay Area Realtor

www.BrianRipp.com serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.

In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage averaged 5.03 percent for the week ending October 29, 2009 - up from the previous week when it averaged 5.00 percent.
Last year at this time, the 30-year fixed-rate mortgage averaged 6.46 percent.
"Interest rates for 30-year fixed mortgages have averaged just below 5 percent this year, which is the lowest 10-month average since the survey began in 1971," said Frank Nothaft, Freddie Mac vice president and chief economist.

Brian Ripp, CRS, GRI, Broker - your Bay Area Realtor

www.BrianRipp.com serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.

Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp

When selling your home, the best thing you can do is stage it for prospective buyers. Staging is simply preparing your home in a way that creates buyer interest, and it can make a dramatic difference in the selling price and the speed of sale. Try these quick staging tips:

•· Make the exterior of our home welcoming by staining or painting your front door and cleaning the windows inside and out so they sparkle.

•· Remove stored items from your garage to make it look spacious and organized.

•· Make sure your home is infused with light. Take advantage of sunlight by opening your drapes. If showing in the evening or on over-cast days, turn on lights in every room.

•· Brighten the interior of your home with fresh, light-toned paint.

•· Clean and organize kitchen cabinets, drawers and pantries. Remove any clutter from countertops. You may want to bake a pie or cookies before a showing to make your home smell inviting.

Of course, this works for both selling your home or even if you are planning on renting it out.

Feel free to contact me if you have questions or concern regarding any real estate issue.

Brian Ripp, CRS, GRI, Broker - your Bay Area Realtor

www.BrianRipp.com serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.

Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp

Purchasing a condo often is the first step in the homeownership process, and can be a good opportunity for first-time buyers. However, as more homeowners living in community developments with homeowner associations find themselves in trouble, many are not paying their dues. As a result, residents who do pay their HOA dues are seeing increases in their monthly bills or unexpected special assessments. This is especially true for communities that do not have enough funds in reserves to pay for property maintenance and repairs. Buyers considering the purchase of homes in community developments with HOAs are advised to closely monitor the homeowner association's financial health.

What you should look out for:

· Buyers are advised to request all financial documents relating to the homeowners' association during the home inspection period. In most cases, buyers receive these documents one to two weeks before closing, or find they are incomplete. Financial advisors recommend that buyers work with their REALTOR® to ensure the documents are received in a timely manner-preferably during the contingency period in their contract.

· When reviewing the financial documents, buyers should note that two-thirds of the association's budget should be operating expenses such as water, lights, elevator maintenance, and landscaping; the rest should be set aside in a reserve fund for long-term maintenance and repairs.

· If the expenses exceed revenues due to foreclosures, unpaid dues, or other reasons, buyers should ask the association's manager or board of directors what its plans are to make up for the shortfall, and whether the association expects an assessment or higher dues. It also is important to note if the financial deficit will be made up with shorter pool hours, or a reduction in landscaping and other community amenities, as these could affect not only the comfort of the community, but also the future marketability of the property.

· While the financial health of a homeowners' association is an important factor in the purchasing decision, it shouldn't deter home buyers from purchasing condos. Many first-time buyers purchase condos to enable them to become homeowners. Typically, condos are more affordable than single-family homes, offer community amenities, and may allow a buyer to purchase a home in a highly desirable area where they otherwise could not afford.

· Although not required, it is becoming more common for associations to hire outside firms to look at all long-term anticipated repairs and replacements within communities over a period of 30 years, add up the costs, and create a payment and maintenance schedule. The monthly dues charged to each owner should reflect the amount of money needed to pay for the necessities.

· Associations ideally should save enough money over time to pay for every contingency, such as roof leaks, pipe bursts, sidewalk cracks, and the like. However, most associations often deplete reserve funds to pay for operating costs and other expenses. Although the percentage of funding necessary varies by the age and size of a community, in general, buyers should be concerned if funding is below 40 percent, as it could result in a special assessment in the future.

information from and w/permission from C.A.R.