It seems that now everyone knows it’s the bottom of the market. It’s on the news shows and in news articles. The secret is out! You were smart to wait, but the waiting is over.
We’ve been previewing foreclosed homes for sale in Sonoma County for quite some time. We see 30 to 40 homes a week and keep abreast of new ones that come on the market. This way we know what’s available. There are 3 types of foreclosed homes. #1 is the nice, clean, move-in ready home. There aren’t too many of these. There are nice ones that could use paint and carpet cleaning, but there are not too many that are pristine-pretty. #2 is the “cosmetic fixer”. The carpets or flooring needs replacing. Cleaning and paint is needed and maybe some minor fix-up of fixtures or countertops. Not too bad, but a handy person is needed. #3 is our favorite because they are at the bottom-bottom of the market. These are the “contractor special”. They need work. They need a carpenter. Not many people have the money or can take the time to fix these up. The good news is there are less buyers looking for these, less competition. Perfect!
We are fixers at heart. It’s fun to see an ugly house transform into a beautiful home. We use “private money” investor loans to buy and fix up a house. Private money is a loan from a private individual at a high interest rate. An institutional lender would NEVER lend on a contractor special. So, we pay the private money lender/investor high interest, fix up the house, sell it and everyone makes money.
We’ve been in business for 20 years in Santa Rosa and have always had “private money” investors willing to do loans. It’s another alternative in this difficult lending market.
Lynn Tardibuono is a CA Realtor with over 23 years experience in Sonoma County real estate. Her number is (707) 523-2099.
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LENDER’S VIEWPOINT
By Forest Tardibuono, Guy In The White Hat
“Hard Money” Loans
There was a really good article in the Wall Street Journal last week about Hard Money loans. It was informational to borrowers and investors alike. It spoke of the fact that Hard Money loans will account for 1% of the 5.5 million home loans originated this year, up sharply from prior years.
It mentioned “Hard Money” filling an important void. Look at just a few instances.
1. You just did a short sale on your home and want to buy another one. Your favorite bank won’t even talk to you. You know that prices are at rock bottom and you can buy the same home that you bought 5 years ago for $400,000 now priced at $195,000! Hard Money can fund that loan!
2. You lost your job and your credit is shot. You now are back to work in your old job making the same money and you want to buy a house. You’ve got 30% down. No bank will touch you as your FICO score is 525. Hard Money can fund that loan!
The Wall Street Journal article further states that the fees and rates are no doubt higher than a bank, but it is well worth it as “no bank is willing to listen.”
The real gist of the article is to buy a home. Even at Hard Money rates it’s worth it because you’d be getting in at the bottom of the market and down the road could refinance to a 30-year fixed rate loan once qualified again. Your gain from buying at the right time can offset the cost using Hard Money.
Take advantage of a Hard Money loan and be a Buyer, or help your potential Buyers succeed at getting into a new home by directing them to such available financing!
This ancient adage simply means that the facts of a matter point to one conclusion. Since I write articles about lending and real estate, I’ll give you the facts and let’s see if “all roads lead to Rome”, that is, we conclude the same thing.
Interest rates on 30 year and 15 year fixed rate mortgages are at historic lows.
Mortgage interest deduction is still intact.
Property values are at or near the bottom of the market in many areas.
Owning a home is as cheap as renting in many areas of the country.
There are lots of homes being sold everywhere in the country.
Loans are being made in all areas of the country.
FHA ( Federal Housing Administration) still makes loans to Buyers with 3.5% down and there are still zero down programs!
Hard Money loans now account for 1% of all loans done in the USA. With a good down payment you can buy a home even if you just did a short sale, had a property foreclosed upon and/or did a bankruptcy or are in bankruptcy.
In the county I live in (Sonoma County), the median price for a home has risen for the last 3 months.
America isn’t going to dry up and disappear. It will recover from the current mess.
What do you conclude from the above?
If you are considering buying a home – go and do it right now!
All roads lead to “Home”.
Provide real estate, do hard money loan financing for mortgages at good rates based on home equity, specializing in poor credit borrowers since 1988.
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