Since the mortgage meltdown, it has become harder and harder for Real Estate investors to receive financing through a traditional lending company and many of them have to find additional means to finance their investment properties. Continue reading Paying for your investment properties
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Settles Report for 9/1/2014 to 9/8/2014
Last week we did not publish the Settles Report. We questioned some of the reported numbers that where subsequently corrected, but too late for us to publish the report during that week.
Things to consider when you and your REALTOR holds an open house
The house is listed. It is online with the MLS and various other websites. The sign and informational box is in the yard. You are planning for your open house. Continue reading Things to consider when you and your REALTOR holds an open house
Student loans are affecting home buyers
Ever since the mortgage rule changes that went into effect in 2009, a small but ever growing title wave has been building. Individuals who lost their jobs during the downtrend of the market and decided to go back to school to earn a different degree, or updating their personal education, to put them into a better position for a better paying job. They are not only facing an ever tighter job market but also have put themselves financially behind the 8 ball when it comes to being able to qualify for a mortgage.
New rules that go into effect January 21st 2015 that will affect FHA loans
Since the housing crash we have witnessed more and more rule and regulation changes that affect the way loans are written. Making changes and adjustments to current rules, and writing new rules, has not slowed and I don’t see them slowing down anytime soon. The new changes that will go into effect in 2015 will not affect your current FHA loan unless you refinance. Continue reading New rules that go into effect January 21st 2015 that will affect FHA loans
Settles Report for 7/21 to 7/28/2014
During this week Marion County Indiana has picked up steam with their active listings. They had 418 new listings that were made available to the public compared to Hamilton County who slowed down and only had 145 properties that were made available. Compared to last week Hamilton County had a drop in new listings of over 50%. Johnson County had 82 new listings that were made available to the public which was about the same number as last week.
Marion County Indiana new rental proposals
Be aware Proposal 195 which is being introduced to create a Marion County Indiana landlord registry. Landlords have to re-resister themselves on an annual basis as a landlord. The reason given for this registry is that many properties in disrepair and vacant are owned by investors. About 50% or more of them are owned by owner occupants who no longer can pay for their mortgage.
Settles Report
To make things simpler we are focusing only on three Counties that make up the central Indiana BLC for our report for the time between July the 7th and July the 13th. When you are looking for information on additional counties that are part of the Central Indiana MLS contact the Settles Team.
Marion County had the most properties listed during that week totaling 404. Hamilton County had 203 properties that where made available for sale and Johnson County had 70 properties that were made available to the public.
For Marion County Indiana, Washington township was the area where most of the homes where made available for sale with 67 new listings. Lawrence Township was not far behind with 62 new available properties. Average list price for Washington Township was $245,488 and the average for Lawrence Township was $205,026.
In Marion County 185 Properties had an accepted offer (in escrow) and 230 closed during that same time. Washington Township had the most closings totaling 41 with an average sold price of $223,859. That was about 5.5% below the asking price.
Lawrence and Perry Townships both had 30 closings each week. Perry Township had an average day on the market of 66 days and Lawrence Township had an average of 62 days on the market. The average sales price for Lawrence Township was $184,741 which was 2% below the original asking price and Perry Township had an average sold price of $116,282 which was 4% below the original asking price.
Johnson county Indiana also had a busy week. Not as busy as Marion county, but Johnson County was not sitting still. White River Township was the listing leader with 27 new available properties and Pleasant Township was not that far behind with 21. The average list price for White River Township was $249,248 and Pleasant Township was $164,333.
37 properties in Johnson County had an accepted (in escrow) offer and 45 closings occurred that same week. Pleasant Township had the most closings totaling 20, and White River Township during that same week had 14 closings. Pleasant Township had an average sales price of $120,696 which was 3% below the original asking price and White River Township had an average sold price of $260,316 which was 6% below the original asking price during the same time.
Hamilton County Indiana had not been lazy during that week. Clay Township had the most listings that were made available during that week totaling 58, and with 46, Fall Creek Township was right up there as well. The average list price for the Clay Township was $390,620 and Fall Creek Township was $ 315,685.
111 properties in Hamilton County had an accepted (in escrow) offer and 140 closings during the same week. Clay Township had the most closings totaling 38, and Fall Creek Township during that same week had 28 closings. Clay Township had an average sales price of $379,146 which was 4% below the original asking price and White River Township had an average sold price of $260,316 which was 2% below the original asking price during the same time.
FHA flipping rule waiver still in affect
I am finding a lot of confusion and different interpretations when it comes to flipping homes using HUD/FHA loans. The last time I heard and read on the Federal Registrar website, was that HUD still has a waiver in place until the end of December 2014 that is applicable to all single family properties being resold after the 90-day holding period after acquisition.
There are some stipulations that are still in place even with the flipping rule waiver.
- The property was openly marketed and was available for any type of buyer.
- The property was not repeatedly flipped over the last 12 months
- The transition needs to be an arms-lengths transition.
When a property is marketed for more than 20% of the current sellers purchase price there will be additional stipulations before the property can close with an FHA loan.
- Property will need a second appraisal and the buyer is not allowed to pay for the additional appraisal. It has to be paid for by the investor.
- Investor has to justify and prove the value of the increase in pricing by the additional appraisal and supporting documents.
- An FHA approved inspector has to inspect the property and any needed repairs or updates need to be completed prior to closing by the investor and those repairs have to satisfy the FHA inspector.
From what I can see on my end, you still can flip a property within the 90 day period and have a FHA buyer. Just when the property is priced 20% above your original purchase price you have to jump though some extra hoops to get the property approved for the FHA.
Attached is the FHA flipping waiver ruling for your review.
When you have any questions about this or any additional Real Estate questions, feel free to contact the Settles Team.
PLANNING TO START TO INVEST IN REAL ESTATE?
Getting started in Real Estate acquisition could be a scary and daunting undertaking. When you break it down into small action steps the elephant in the room can get smaller and smaller.
Before considering any Real Estate acquisition, especially for investment purposes, consider first building your real estate advisory investment team. On our Settles Team website we have some great information listed for experienced or first time Real Estate investors.
After you have your advisory team in place you need to make some crucial decisions.
For example:
- How to pay for the investment?
- Are you planning on holding or turning the investments?
- When you hold the investments who will manage them?
- How to take title of the property.
There are many more questions you should consider before looking and buying any investment property.
You need to take real estate investing serious and you should consider it as a full time job and not a hobby. Make a business plan with goals, action steps, and an exit strategy.
When you are planning to get into Real Estate acquisition for investment purposes contact the Settles Team. We will be happy to help.