22. April 2009 by Burbank Real Estate.

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Rental properties can be a profitable investment if you do your homework and know what to look for in an investment property.

Here are some tips:

• Know what the area rents are going for in your area and make sure you know what each tenant is actually paying for rent.
• Be able to estimate what reasonable operating expenses will be for the property.  Include such things as utilities and water, if those are paid for by the duplex or property owner, taxes, trash, supplies, gardener, pool, elevator maintenance, building repairs,city fees etc.
• Know the difference between repairs and capital improvements and how those repairs are either passed on to your tenants or accounted for.
• Know if your building is under any form of rent control and how that affects your ability to raise rents.
• Know the gross multiplier, as lenders like to see a rate below 11%.  Gross multiplier is a ratio that is used to roughly evaluate the value of a property.  It’s the sales price divided by gross rental income, before any expenses are taken out.
• Know the capitalization rate, it’s different for each area.  Here in Burbank it tends to average 4.5-5.5%.  The capitalization rate is also a ratio used to try and determine value.  It’s the net rental income divided by the sales price.
• Become familiar with housing laws and eviction procedures.
• Use a realtor who has experience in this area and can direct you to good opportunities and give you good advice.

This post only touches the surface of information needed and is intended as a starting point.

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15. April 2009 by Burbank Real Estate.

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With probate and bank home auctions on the rise,  it’s not a bad idea to check these out if you are in the market for a new home or investment property.  After all, many auctions have either no or very low minimum bids, so your chances of picking up a bargain are good, right?

Maybe.

Some auctions happen at the court house steps while others happen in front of the property.  While many auctions tease you with low or no minimum bids, here are some things to consider:

• Know your market!  It’s critically important to know the comps (comparable sales) for the area and have a price maximum set.
• There will usually be an open house for the public before the auction.  Make sure you preview the property, preferably with a contractor, in order to determine if there are any visible red flags.

• Most auctions require a cashier’s of minimum $5,000 just to get in the door, so be prepared and read the terms of sale thoroughly.
• Personal check is usually ok for the balance of the required deposit, in many cases 10-25%, and if they are giving you a window in which to obtain financing, they will not allow for you to back out if you fail to obtain the financing.    At that point the deal becomes an “all cash” deal and you are required to put up the funds or you lose your deposit.
• All properties sold “As is, with no warranty, termite information etc.
• Many auctions will either have someone there to scoop up the property if it does not sell for their target minimum or they will state that higher bids can be accepted after the fact, as long as they meet the terms set by the court.

I’m not saying you can’t find diamonds in the rough,  real bargains that with a little TLC can be brought back to life for a profit.

But the fact is that there are many shrewd investors out there looking for the same thing and usually the selling entity will have comps for the area and have an aspirational price in mind.

Before you jump in, you should do your homework and read up on how to approach an auction sale in order to make a prudent purchase.

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4. March 2009 by Burbank Real Estate.

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As a licensed Burbank Realtor I have never seen a better time for anyone interested in purchasing Burbank Real Estate.

Let’s look at 3 very compelling reasons I see for buying Burbank Real Estate as soon as you can:

• Interest rates are near historic lows
• Many homes are selling for significantly lower prices compared to a few years ago!
• You can take advantage of a tax credit of up to $8,000 for qualified first-time home buyers

Interest rates

Good mortgage loans are out there and rates have been extremely attractive!  When you look at the history of mortgage rates you can clearly see that mortgage rates have rarely been this attractive. When the economy starts to improve and real estate values increase, chances are interest rates will increase as well.  Current mortgage rates are extremely attractive!

Home prices are falling

Many homes listed for sale in the Burbank, Toluca Lake and Studio City areas are now selling for 30-40% less than a few years ago. There are many aggressively priced REO’s (Real Estate Owned)/ bank foreclosures which have driven home values down all across the San Fernando Valley.

A tax credit gift from Uncle Sam

Remember the faux credit of $7500 for first time home buyers?  I call it “faux” because it was not a credit, as it did have to be repaid.  Well, some good news here, under the recently approved First-Time Home Buyer Tax Credit in the “American Recovery and Reinvestment Act of 2009“, there is an actual credit(does not need to be repaid if you live in the home for 3 or more years) of up to $8,000.  As long as you have not owned a home in the last 3 years, this will be your primary residence and your income meets the appropriate criteria, you can qualify for the credi.

Make sure you talk to your CPA if you have any questions regarding these credits and how it will impact your situation.

Don’t forget to get pre-approved for a mortgage loan which will give you bargaining power when you find the home of your dreams and then start the search for your Burbank home.

Call me with any questions at 818-795-8474 or email me at ana@anaconnell.com

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10. February 2009 by Burbank Real Estate.

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When a listing is listed as a short sale it does not necessarily mean it’s a short sale.  What this tells you is that the listing agent and seller hope that the bank will accept an offer on the property.  When it says that the bank has approved a short sale at a particular price, then you know at least part of the hurdle has been cleared.  But banks reject offers all the time.

The main reason that banks reject short sale offers has to do with the following scenarios:

• Short sale offer price is too low or below what the bank has agreed to accept.  Remember that, by definition, a short sale is when a bank agrees to accept less than the amount owed to the bank.  Make sure you include a CMA(comparative market analysis) to justify your price.  The bank will look at several appraisals, so if it feels it can do better it will reject your offer.

• Offer package is incomplete.  Make sure you get a list from the bank of all expected documentation.  Don’t be surprised if you agent ends up having to fax the documents several times as the banks are notorious for losing or misplacing paperwork. It will help if everypage is referencing the property address.

• Buyer does not qualify for the loan.  This is standard practice nowadays, but make sure you are pre-approved for a loan before you make any offers.

• Bank sold the loan.  It’s not uncommon for the bank to sell the loan during the short sale negotiations.  Sometimes the bank does not realize it sold the loan until well into the process.

Remember that, on average, it takes anywhere from 6-12 months for a short sale property to sell, sometimes much longer.  I have seen offers get accepted 4-5 months after submission due to the backlog at the bank.

Buying a short sale property is not for the weak, but you can pick up some good deals if you know your area pricing.

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14. November 2008 by Burbank Real Estate.

Are you aware that the conforming loan limits put into place by the Economic Stimulus Act of 2008 will be going away soon?

The Federal Finance Agency (FHFA) just announced that starting in 2009 loan limits may change depending on where you live. The new limit will be $417,000 for the majority of the country, high cost real estate areas such as Los Angeles, Burbank, Studio City, Toluca Lake, San Fernando Valley etc. will be capped at $625,000. This is important as the current conforming limit for these areas is $729,750.

Many had been wanting the higher limit to remain as the conforming loan limit determines the maximum size loan that Fannie Mae(FNMA) and Freddie Mac( can buy or guarantee. Additionally non-conforming loans usually offer higher interest rates than then conforming loans.

There is still a strong lobbying effort going on to have Congress make the higher limit permanent, we’ll see what happens.
For more information:

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