Allow me to introduce you to the latest in the mortgage business for 2008 - Risk Based Pricing or Loan Level Price Adjustments. Basically, the concept is that additional points are being added to loans based on how risky the borrower is. These are not the discount points used to buy down the interest rate, these are additional points making the loan cost more. The lower the credit score of the borrower, the more points and cost.
Yesterday I was chatting with a lender at First Horizon about a potential "refi" on an investment property. Here's the scoop or an example on what the points are looking like now based on the offerings from First Horizon:
Full Doc
680 & Above - no points
679-660 - 1 point
659-640 - 1.5 points
639-620 -1.75 points
under 620 - 2.5 points
Stated Income Loans -Must have a minimum of 680 score
720 Score - .5 point added for stated income
680-720 - 1 point added for stated income
This is a far cry from the old days when as long as the borrower had over a 620 credit score, loan costs were basically the same.
Thankfully, real estate investing provides creative ways to invest even without having great credit. However, when you are ready to refinance those deals that didn't require credit to purchase them, credit becomes very important. If your credit is not the best and even if you are successfully investing without credit, begin working towards improving your credit score. There's tons of great information at www.myfico.com.
Saturday, January 12, 2008
Tuesday, January 8, 2008
Healthy Housing Meeting
Thanks to my new friend, Michelle Uchiyama, who I met through the Fuller Center for Housing, I attended a meeting this morning at Georgia Tech's Center for Quality Growth and Regional Development Center on Healthy Housing. Gaylon Rogers of Labor of Love Ministries, Inc. presented on the issue of poverty and homelessness . Gaylon's ministry is putting together a planning meeting, which will be held in February to discuss making positive changes around these issues through training, green housing, working with Beltline project and more. Sign up for my ezine at www.transformit.net/ezine.html to stay up to date on the latest meetings and progress.
Gaylon and I will meet next week to discuss the idea of Transform A Neighborhood http://realestateinvestorsresource.blogspot.com/2007/09/transform-neighborhood.html
http://www.transformaneighborhood.org/ partnering with Labor of Love to create transformation in neighborhoods with real estate investors involved in the process.
For so long, I have felt this gentle nudging and calling to this cause, Transform A Neighborhood. I continue to pray for God's will and direction with this project. He continues to send great resources and people to help move it forward. If you feel called as a real estate investor or personally to use your talents and resources for a greater good and cause, please, email me @ nspivey@transformit.net.
Gaylon and I will meet next week to discuss the idea of Transform A Neighborhood http://realestateinvestorsresource.blogspot.com/2007/09/transform-neighborhood.html
http://www.transformaneighborhood.org/ partnering with Labor of Love to create transformation in neighborhoods with real estate investors involved in the process.
For so long, I have felt this gentle nudging and calling to this cause, Transform A Neighborhood. I continue to pray for God's will and direction with this project. He continues to send great resources and people to help move it forward. If you feel called as a real estate investor or personally to use your talents and resources for a greater good and cause, please, email me @ nspivey@transformit.net.
Wednesday, December 19, 2007
The Business Side -XP to Vista ... new computers/business systems
Things have really been crazy lately - a part of the craziness has been my computer crash leaving me behind on many tasks including blog postings. I've been wanting a new computer that's faster, has more memory and capacity for some time now. It's amazing how wishes can come true. My old computer started breaking down piece by piece -it was so slow, then the fan stopped working and within a few days the screen went blank. A new project and fast, I was now looking into the latest and greatest in the computer world.
Everyone said Vista is a problem, find a computer with XP. Well, that was close to impossible. The only option I found for laptops was to have a new machine built with XP by Dell. Since I was not interested in Dell and even the Mac didn't support my business applications like ACT, Quickbooks and other programs, my option was to upgrade to Windows Vista - so I have.
I don't think that the problem is that Vista is a bad operating system. Hey, years ago I had to buy a new desktop when the only thing available was the ME operating system, which was nothing but a problem. Vista seems to work great. The problem is that it doesn't work with most older versions of software, which means upgrade, upgrade, upgrade and spend more money. Most all of my programs have had to be upgraded and that takes time and money.
On the bright side, having a new computer that is speedy with the latest and greatest features and software is a great feeling. I'm looking forward to rocking in the new year with a fast computer!
With that said, let me give you the coaching tip here. Researching, purchasing and overcoming the change with the new computer and transfer of data (let alone this being the holiday season) has been a challenge. However, remembering that I can go into the new year faster and better as a result of this challenge provides me with a light at the end of the tunnel. Most things that are worth while require work and sometimes even a little aggravation along the way, but the important thing is to keep the right perspective and the vision of what is to come in the future - try to visualize the fruits of your labor whether it's a computer, real estate or other.
Everyone said Vista is a problem, find a computer with XP. Well, that was close to impossible. The only option I found for laptops was to have a new machine built with XP by Dell. Since I was not interested in Dell and even the Mac didn't support my business applications like ACT, Quickbooks and other programs, my option was to upgrade to Windows Vista - so I have.
I don't think that the problem is that Vista is a bad operating system. Hey, years ago I had to buy a new desktop when the only thing available was the ME operating system, which was nothing but a problem. Vista seems to work great. The problem is that it doesn't work with most older versions of software, which means upgrade, upgrade, upgrade and spend more money. Most all of my programs have had to be upgraded and that takes time and money.
On the bright side, having a new computer that is speedy with the latest and greatest features and software is a great feeling. I'm looking forward to rocking in the new year with a fast computer!
With that said, let me give you the coaching tip here. Researching, purchasing and overcoming the change with the new computer and transfer of data (let alone this being the holiday season) has been a challenge. However, remembering that I can go into the new year faster and better as a result of this challenge provides me with a light at the end of the tunnel. Most things that are worth while require work and sometimes even a little aggravation along the way, but the important thing is to keep the right perspective and the vision of what is to come in the future - try to visualize the fruits of your labor whether it's a computer, real estate or other.
Thursday, November 1, 2007
Evaluating Neighborhoods
I always tell my real estate investor clients to talk to the neighbors in any area where they plan to invest. Getting familiar with an area is easy if you will just walk around and talk to the neighbors. You will be surprised what you find out about the neighborhood, the neighbors and even specific properties when you do that. I sometimes casually walk my dogs in new neighborhoods where I am considering investing and stop along the way to chat with anyone I see outside.
I have a friend who is looking for a new home in his daughter's school district. His daughter lives with his x wife and their home is quite a distance from his current home. He wants to be closer to his little girl so he has set out on a search for a new home. After driving through numerous neighborhoods in the school district and narrowing it down to a couple of neighborhoods in the area, he was still having a tough time deciding between those neighborhoods.
On Halloween, we were taking his daughter Trick or Treating. Then this idea popped into my head and I said, "Let's Trick or Treat" in those neighborhoods that you've chosen thus far!" We did just that. After our Trick or Treating adventure, his decision was very easy and he decided on one neighborhood that is his favorite.
Too bad Halloween doesn't come around more often -what an easy way to check out the neighbors and get more information on a neighborhood. Even when it's not Halloween, you can still walk the neighborhood and talk to people. Give it a try. One of my clients once told me a story about how he had heard my words about "talking to the neighbors ring in his ears". He was shy and uncomfortable with just trying to strike up a conversation with people. However, he finally decided to talk a kid who was riding his bike. That little boy ended up telling him that someone had been killed in the house he was looking at purchasing. See what I mean? There's a lot of information available for you if you'll just get out in the neighborhood and start talking to people!
I have a friend who is looking for a new home in his daughter's school district. His daughter lives with his x wife and their home is quite a distance from his current home. He wants to be closer to his little girl so he has set out on a search for a new home. After driving through numerous neighborhoods in the school district and narrowing it down to a couple of neighborhoods in the area, he was still having a tough time deciding between those neighborhoods.
On Halloween, we were taking his daughter Trick or Treating. Then this idea popped into my head and I said, "Let's Trick or Treat" in those neighborhoods that you've chosen thus far!" We did just that. After our Trick or Treating adventure, his decision was very easy and he decided on one neighborhood that is his favorite.
Too bad Halloween doesn't come around more often -what an easy way to check out the neighbors and get more information on a neighborhood. Even when it's not Halloween, you can still walk the neighborhood and talk to people. Give it a try. One of my clients once told me a story about how he had heard my words about "talking to the neighbors ring in his ears". He was shy and uncomfortable with just trying to strike up a conversation with people. However, he finally decided to talk a kid who was riding his bike. That little boy ended up telling him that someone had been killed in the house he was looking at purchasing. See what I mean? There's a lot of information available for you if you'll just get out in the neighborhood and start talking to people!
Tuesday, September 18, 2007
Atlanta Progressive News on Atlanta Housing Authority
After my recent posting regarding the Impact of Fraud & Foreclosures on Investors, I was contacted by Atlanta Progressive News. They have done numerous stories on the Atlanta Housing Authority and the current state of affairs with public housing, which you may find interesting as an investor. You can read the stories on their website -here is the link to the story done after our conversation http://www.atlantaprogressivenews.com/news/0228.html .
Thursday, September 13, 2007
Transform a Neighborhood
I’ve had this little idea for a while about a way that investors can unite to make a positive difference in lives, neighborhoods, communities and more and make money while doing so. The idea is called “Transform a Neighborhood”.
It started with my thinking, “Wouldn’t it be nice if someone spearheaded a project of getting investors together to go into a neighborhood that needs improvement where properties can be purchased inexpensively and a big positive impact can be made together?” I have thought that thought many times. Then one day it hit me that maybe I am the person to spearhead the initiative. Now with all of the mortgage fraud and foreclosures–especially in certain neighborhoods, I really see a need and an opportunity here.
It seems to me that investors are often “lone rangers”; and, I often wonder what would be possible if we were united. I see this as a project where investors would collectively mastermind the idea, recruit resources and collaboration from the city, county, police force, drug task force, corporate sponsors such as banks, and so forth. However, each investor would individually purchase their own property or properties within the neighborhood that is being transformed.
Thus far, I’ve created a file folder titled, “Transform a Neighborhood”, where I jot down notes and throw them in there, stuck a little sticky note on my dream board with “Transform a Neighborhood” written on it, and had a long conversation with one of my coaches about it. Now, I figure it’s time to take the next step, put it out there for exploration and ideas from other investors, like you, to see what’s possible when we unite. Emily Dickinson said, “I dwell in possibility.” Well, I do, too; and dwelling in possibility creates all sorts of amazing things! If you are interested in the possibilities surrounding this idea, you can get involved by posting your comments and or emailing me at nspivey@transformit.net .
It started with my thinking, “Wouldn’t it be nice if someone spearheaded a project of getting investors together to go into a neighborhood that needs improvement where properties can be purchased inexpensively and a big positive impact can be made together?” I have thought that thought many times. Then one day it hit me that maybe I am the person to spearhead the initiative. Now with all of the mortgage fraud and foreclosures–especially in certain neighborhoods, I really see a need and an opportunity here.
It seems to me that investors are often “lone rangers”; and, I often wonder what would be possible if we were united. I see this as a project where investors would collectively mastermind the idea, recruit resources and collaboration from the city, county, police force, drug task force, corporate sponsors such as banks, and so forth. However, each investor would individually purchase their own property or properties within the neighborhood that is being transformed.
Thus far, I’ve created a file folder titled, “Transform a Neighborhood”, where I jot down notes and throw them in there, stuck a little sticky note on my dream board with “Transform a Neighborhood” written on it, and had a long conversation with one of my coaches about it. Now, I figure it’s time to take the next step, put it out there for exploration and ideas from other investors, like you, to see what’s possible when we unite. Emily Dickinson said, “I dwell in possibility.” Well, I do, too; and dwelling in possibility creates all sorts of amazing things! If you are interested in the possibilities surrounding this idea, you can get involved by posting your comments and or emailing me at nspivey@transformit.net .
The Impact of Fraud & Foreclosures on Real Estate Investors
Fraud and foreclosures have a huge impact on investors. On one hand, foreclosures as a result of mortgage fraud and the sub prime fall out create huge opportunities for investors to buy at deep discounts. This is low hanging ripe fruit. On the other hand, the reality is that there are numerous negative ripple effects from fraud and foreclosures, which is causing the tightening of standards on investors and making it harder to do business. This is the rotten fruit; and it really stinks!
Certain zip codes have really been hit hard with fraud and foreclosures creating issues for neighborhoods and for real estate investors. The neighborhoods are sitting with vacant and boarded up houses. Normally, this would be great for some investors, who love to buy these types of properties; but the problem is that due to all of the fraud and issues around values of these properties, lenders do not want to lend in certain zip codes. Ethical quick turn investors and wholesalers sit with an inventory of properties in these areas with no means of their clients obtaining funding for them to move the inventory unless they take a loss. Neighborhoods with high vacancy rates and boarded up houses usually have issues with criminal activities such as break ins, theft, drugs and prostitution. How does this change when there are no funds available for these certain zip codes to begin repairing the problem?
Another big and growing issue is identity theft, which has an impact on landlords. With all of the identity theft, the big credit reporting agencies are now requiring tenant screening companies to perform a much more thorough inspection on any company or landlord who applies for tenant and credit screening services. The tenant screening company must now check your credit before providing services and perform an inspection of your office to ensure that you have the proper security measures around applicant’s credit information kept in your office. By the way this inspection is done at your expense.
Fraud and foreclosures displace tenants, causing agencies such as the Atlanta Housing Authority (formerly Section 8) to require more paperwork and thorough investigation of landlords. In addition to all the former requirements, now requirements include an authorization to release information regarding the mortgage on a property (to verify that the mortgage is good standing), proof of incorporation if you are incorporated and/or using a management company that is incorporated, and authorization to check your credit as a property owner. Although this is a reasonable effort to protect tenants, it seems a little invasive for landlords.
Legislation is another issue for investors. Unscrupulous investors using creative investing techniques in unethical ways are taking advantage of people. These people end up in court and the next thing you know, states are trying to outlaw the creative investing techniques all because they have been used in an unethical manner. This is unfortunate especially considering the fact that these same techniques are great when used properly.
For real estate investors, the ripple effects of fraud and foreclosure are long and wide. Although there are negative effects, there is also a very positive side and an opportunity. The key is in being prepared. Prepare your investing business for the rotten and the ripe fruit, the costs and the benefits of today’s real estate investing market. “Luck is what happens when preparation meets opportunity.” ~ Elmer Letterman
Certain zip codes have really been hit hard with fraud and foreclosures creating issues for neighborhoods and for real estate investors. The neighborhoods are sitting with vacant and boarded up houses. Normally, this would be great for some investors, who love to buy these types of properties; but the problem is that due to all of the fraud and issues around values of these properties, lenders do not want to lend in certain zip codes. Ethical quick turn investors and wholesalers sit with an inventory of properties in these areas with no means of their clients obtaining funding for them to move the inventory unless they take a loss. Neighborhoods with high vacancy rates and boarded up houses usually have issues with criminal activities such as break ins, theft, drugs and prostitution. How does this change when there are no funds available for these certain zip codes to begin repairing the problem?
Another big and growing issue is identity theft, which has an impact on landlords. With all of the identity theft, the big credit reporting agencies are now requiring tenant screening companies to perform a much more thorough inspection on any company or landlord who applies for tenant and credit screening services. The tenant screening company must now check your credit before providing services and perform an inspection of your office to ensure that you have the proper security measures around applicant’s credit information kept in your office. By the way this inspection is done at your expense.
Fraud and foreclosures displace tenants, causing agencies such as the Atlanta Housing Authority (formerly Section 8) to require more paperwork and thorough investigation of landlords. In addition to all the former requirements, now requirements include an authorization to release information regarding the mortgage on a property (to verify that the mortgage is good standing), proof of incorporation if you are incorporated and/or using a management company that is incorporated, and authorization to check your credit as a property owner. Although this is a reasonable effort to protect tenants, it seems a little invasive for landlords.
Legislation is another issue for investors. Unscrupulous investors using creative investing techniques in unethical ways are taking advantage of people. These people end up in court and the next thing you know, states are trying to outlaw the creative investing techniques all because they have been used in an unethical manner. This is unfortunate especially considering the fact that these same techniques are great when used properly.
For real estate investors, the ripple effects of fraud and foreclosure are long and wide. Although there are negative effects, there is also a very positive side and an opportunity. The key is in being prepared. Prepare your investing business for the rotten and the ripe fruit, the costs and the benefits of today’s real estate investing market. “Luck is what happens when preparation meets opportunity.” ~ Elmer Letterman
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