After 8 months of tight financing parameters, the noose has loosened. We had plenty of investors that had the downpayment requirements satisfied, but they just couldn't buy because they owned more than four properties. The guidelines are as followed (please bear in mind that I'm a real estate broker, not a lender. Consult with your trusted loan officer about your specific situation).
As of today, you can own more than four properties and still get financing. Your credit cannot show a bankruptcy or foreclosure in the last 7 years. Also, you cannot have any mortgage lates in the last 12 months.
Reserve Requirements: PITIA- Principle, Interest, Taxes, Insurance, Association (HOA fees plus SID/LID)
If you own 1-4 properties- 6 months PITIA reserves for the property you're getting the financing on, plus 2 months PITIA reserves for each other property.
If you own 5-10 properties- 6 months PITIA reserves for the subject property, plus 6 months PITIA reserves for each other property.
It's still a minimum of 20% down (of course), and the Rent Loss Insurance is no longer required.
So financing has become available again! With all the reserve requirements, you do have to have substantial capital to support your properties, but that's good to have anyways. Rates are LOW, investor points may cost a little bit, but prices in most markets have dropped as much as 50% (some parts of CA as much as 70%).
Also, here in Las Vegas, there's a CULINARY workers program (primary residence) that just became available. 100% financing (using a no interest, no payment 2nd mortgage), details are just coming out now.
I've had some interesting conversations in the past couple of weeks about starting over. I've been a resident of Las Vegas since 1992 and have been in the real estate business since 2000. To say the least, it's been very difficult this past year. The temptation is to start over, but where... doing what...?
These are obvious questions that still go unanswered as the thought has just entered my mind. Is this something you ever think about? Don't get me wrong, I don't mean a start over in all senses of the term (I have a family that I love to death, and I wouldn't change that, I'd just take them with me on this new adventure...). What will it be?
Rumors have been started that there will be a mass outmigration of financial services professionals because the job market in NY and the Northeast has imploded. Where will those people go? Talk about pressing the restart button. I guarantee you, they made no less than $100k a year and now what can they do? How can you afford the taxes on the apt. in NY with no salary, or limited income. I can assure you, stockbrokers don't save money in the bank. They invest, and they take lots of risk. My guess is they're moving to Las Vegas to start over. Why not, what better place? Florida? Probably not. Maybe Phoenix or San Diego. But now's the chance to get out of that 6 degree stuff and move to the desert and start over. Get yours, I'm going to get mine.
Broker/Salesman at Keller Williams Realty Las Vegas. Certified Real Estate Negotiator Approved REO Broker for a major bank. Trained and Certified for REO sales
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