Justin T. Bonney, Realtor® DRE#01338897 Certified HAFA Specialist

Are you sitting on the fence? Are your clients really investors or just wishfully thinking? What is your required rate of return? What are your cash on cash return requirements? What is the vacancy rate you are using for the subject property you are trying to lease out after acquiring? What is the underlying cash flow? NOI? These are questions that need answers.

In my immediate area, it seems that the summer had all the flippers out overbidding every single REO. Many of those have fallen out or gone back on the market, many that closed and were rehabbed are still sitting. Single Family Flipping is a very lucrative but also very stressful way to make money. You tend to make money when you buy, leaving very little margin for error when your are competing against multiple offers. Having multiple exit strategies in the current marketplace are necessary to protect profits. I just structured a lease option for a seller that could not sell their flip and make money. He opted for the cash flow after holding for 6 months with one offer that fell out. Getting the property occupied ahead of the holidays was a wise choice to alleviate the outflows, plus the cost of insurance fell nearly 50% after the tenant buyer moved in. Exit strategies change all the time.

After reviewing notes from a college course in early 2000s for investment property analysis, I remember saying then "I wish that these were the numbers we were really dealing with. During the last few months, the numbers on many 2-4 units are hitting these numbers. The most difficult thing to do is predict the future, but also taking action while others are fearful can be the most daunting and challenging step in investing, while it can reap hefty rewards if done correctly and with a little patience and perseverance.

Just make sure to have several outs in case the market turns against you. Investing for cash flow will protect against the unknown. If you buy a SFR to flip, can you rent it and still cover the mortgage and all expenses while still bringing in a steady stream of income? A question I ask all clients I make offers for right now. Happy investing!

Facing the prospect of foreclosure can be a very troubling experience. It not only means losing the home, but a huge hit on your credit rating that may preclude you from getting another mortgage for a long period of time. Considering the housing market in the San Fernando Valley and the difficulty many people are having with paying their mortgages, this is a problem that will not go away soon.

The best way to deal with foreclosure is to avoid it in the first place if possible. The mistake most borrowers make is that they wait too long until foreclosure is the only choice. In many cases if you are still making the monthly payment, working with your lender or loan servicer can stave off potential trouble before it’s too late. But there are ways to avoid a foreclosure even if you are close to default, one method is taking advantage of what is known as a “short sale”.

The Home Affordable Foreclosure Alternative or HAFA program allows borrowers who are not eligible for a new loan, don’t qualify for the Home Affordable Modification Program (HAMP) and can’t avoid foreclosure to facilitate either a quick sale of the home, known as a HAFA “Short Sale” or file a “Deed in-Lieu” of foreclosure. The short sale works basically the way it sounds, the borrower sells the home on the market, generally for less than what they owe on the mortgage or the best offer. In most cases, the home is “underwater” meaning that more is owed on the property than what it’s worth, a short sale may be difficult to accomplish in terms of fully paying off the mortgage. A “Deed-in-Lieu” is the borrower signing back the home to the lender. In both cases and with the help of HAFA, the borrower will avoid the stigma of foreclosure on their credit rating, so with that preserved, the borrower is in a better position to rent and possibly buy again in the near future.

The main benefits HAFA offers consists of the borrower receiving $3,000 for relocation assistance, the borrower having the opportunity to do either a Short Sale or a Deed-in-Lieu before final foreclosure proceedings are initiated and the borrower is forgiven and released from the first mortgage debt and second as well. Qualifications for HAFA are pretty straightforward as well, most importantly the borrower’s loan one the property had to be drawn up before January 1st, 2009 and the total mortgage monthly payment exceeds 31% of a borrower’s current income .

If a borrower meets both of those qualifications, they may certain take the next step and work with a certified HAFA specialist to see if they can take advantage of avoiding outright foreclosure.

For those facing the prospect of foreclosure in the following communities; Encino, Lake Balboa, Van Nuys, Northridge, Winnetka, West Hills, Canoga Park, Reseda, Woodland Hills, Valley Village, Sylmar, North Hills, North Hollywood, Chatsworth, San Fernando, Panorama City, Granada Hills, Mission Hills, Sherman Oaks, Valley Glen, Porter Ranch, Toluca Lake, and Studio City do not hesitate to give us a call.

Finding a certified HAFA specialist, like Justin Bonney at Tyler Capital Realty & Finance, may save you a great deal of time, effort and your credit rating.

Lake Balboa is a great place to call home for many first time homebuyers, young couples and families for many reasons.

The proximity to the 101 and 405 are very important for those who work on the Westside or in downtown Los Angeles. The commute is already a daily drudge and challenge, but the proximity to the 101/405 interchange make this a great affordable market for first time buyers.

The history of the area dates back to the World War II era. The homes were built originally for the burgeoning demand for starter homes for returning GI's from Europe and the Pacific. Many of the homes were built by the Army Corps of Engineers in the area. Birmingham Charter and the adjacent schools were a military hospital back then.

Most of the homes were built with 2" white oak flooring that was brought in from New Orleans. Most of the bathrooms and kitchen in their original state had built in cabinets with tile shower and bathroom stall consisting of 4"x4" tiles in variations of white, yellow, light green, pink, burgundy and/or a combination of two colors with tile trim. Solid homes built to last.

Not to say many homes in the area have been remodeled or additional square footage added and updates to fit the tastes of current buyers and homeowners, you will still see many homes in their original state with the original hardwood flooring which is a big plus for most buyers. Nothing better than pulling up carpeting to find buried treasure of true craftsmanship hiding below. Hardwood floors were standard when the homes were built, carpeting was the fad that caught on in the 60's and 70's to now hardwood flooring is considered a bonus by most.

The Lake Balboa Recreation & Parks Center is truly the central park of the San Fernando Valley. On any given day, there is something going on. Three golf courses, a new baseball complex, skate parks, dog parks, farmers market, tennis courts, basketball, bike trails, lakes, fishing, remote controlled airplane park, archery range, there is something for everyone to do.

What to do on Sunday? How about a nice stroll on the bike paths, fishing at the lake, a round of tennis or golf, kayaking in the lake or how about a barbeque with some family under a shady set of sycamore trees?

Lake Balboa is experiencing a Rennaissance and is taking a turn in the right direction.

Birmingham is now a charter school, there is a Farmer's Market every Sunday, an active and dedicated neighborhood council, close poximity to recreation and parks experiencing a renewed interest and appreciation for being our Central Park of the San Fernando Valley, close to shopping and dining, near Encino and Sherman Oaks, close to the 405/101 Freeway and major public transportation routes like the Orange Line, affordable home prices and a great place to buy your first home.

My wife and I moved here to be closer to work and all the amenities at such a value relative to other areas. Not only do I endorse the area, but my family and I live here too.

A recent trend is starting to emerge for single family homes for lease in the San Fernando Valley area. The starting rate for a 3 bedroom 2 bath in Van Nuys and Lake Balboa has come up to about $2000. The reasonably priced rentals that are tidy and not pending foreclosure pitfalls are going quick.

The price to rent ratios are improving for investors looking to buy and hold single family homes. Renting vs. buying poses a serious analysis. A recent couple I sat down with the other day has been living in the same apartment complex for nearly six years. Along the way they have been growing their family. They have two sons, ages 5 and 2. They moved into a 2 bedroom apartment in the same complex and have been patiently saving and paying off debt to qualify for a home. Currently they are paying $1800 on their lease.

After running their numbers on an property we are considering submitting an offer for, the estimated mortgage payment with a 5% down, 30 year fixed conventional mortgage is going to be nearly $60 more than their current rent including principal, interest, taxes and insurance. The house is modest but in very good condition, however it has a huge backyard with room to expand, privacy and a that no apartment complex can ever give a growing family. Granted, there are some true additional costs to homeownership, but the numbers have never been so favorable in nearly a decade.

I am writing this to tell everyone who has never owned a home or is currently renting and thinking about buying or "sitting on the fence". You can never time the exact bottom of real estate, nor the top. But should your payments on a 30 year fixed with 5% down is comparable to rent for the same size place or better, that signals a great opportunity to get into a home and build equity through principal reduction, the good old fashioned way, maybe when the dust settles with the media and the housing crisis, you may look back and pat yourself on the back. Or kick yourself!

An old wise man once told me, when it makes sense to buy...don't wait...you buy and then wait.