Tag Archives: equialt tampa

The Renter Nation: What’s Behind It?
“After going through what was the housing market's darkest hour, housing is now one of the most popular investments in America.” (StreetAuthority) During the recession, many homeowners found themselves facing some very tough decisions. Renting a home became a viable, albeit temporary, housing option. Or so Americans believed. However, some former homeowners have permanently embraced renting, along with those individuals who cannot yet purchase a home, or those who remain indecisive about home ownership. Along with these changing views of the rental lifestyle, real estate investors are loosening the strings on short sale and foreclosed homes in their portfolios, allowing more rental homes to flow into the market. Together, these forces have created a renter’s nation. Jeffrey Friedman, CEO of apartment REIT Associated Estates Realty, predicts that “of the 5.5 million new households (newlyweds, boomers, college grads) that will be formed between now and 2016, an estimated 3.8...
Wars in the U.S. Housing Market? Bidding Wars That Is…
Mortgage applications for U.S. home purchases have tumbled 17 percent since May on a seasonally adjusted basis and are down 6.9 percent from the same time a year ago. Capital Economics Ltd. last month lowered its 2014 home-sales forecast to 5.2 million from 5.4 million after U.S. pending residential sales for September that slumped 5.6 percent, the fourth straight monthly decline. The firm predicts prices will rise 4 percent next year, half of this year’s projected gain. “We are shifting from a frenzy to where buyers are taking a step back and being more analytical and unwilling to just make rash decisions,” said Ellen Haberle, an economist for Seattle-based brokerage Redfin. Asking prices in September were lowered on about 25 percent of listings, the biggest share in two years, while last month they were cut on 23.8 percent, according Redfin, which tracks 22 cities across the country. The inventory of unsold...
Rolling Over Your 401K
One of our primary services at EquiAlt is handling rollover 401K accounts. The pension funds of your grandparents have given way to a newer type of workplace retirement account which is called a 401K. More formally, this is a defined-contribution pension account named after subsection 401K of the Internal Revenue Service Tax Code which establishes the tax rules on this type of accounts. Many employers offer a 401K retirement account. In most cases, you defer a portion of your current earnings until retirement and in return, your employer matches some portion of your contribution. Each year, a greater percentage of your retirement account becomes vested. This means that even if you separate from your employer, your contribution plus the vested amount of the employer’s contribution is yours to keep. You are allowed to move your account to another investment advisor, which is referred to as...
Looking for a Leader When it Come to Mortgages?
Taking a broad view of mortgage interest rates, one could easily argue that compared to interest rates of the past several decades, today’s rates are comparatively low. However, no one has the opportunity to finance a home with comparison rates from yesteryear. The reality is we are at the mercy of the interest rate markets at the time we are looking to finance a property.  The leading 30-year, fixed rate mortgage in September ascended to 4.53% from 3.35% last spring. That small 1.2% change in interest rates may not seem like much on the surface, but as we drill down, it plays a much larger role in easing pace of the U.S. economy. In late October, Bankrate.com reported that households earning the median income in only 8 of 25 major U.S. metropolitan areas could afford the median priced home in the same metro area. That is...
You Don’t Need to be a Weather Man to Know It’s Warm Outside
To simply make the declaration that “it is warm outside” can be a reckless statement, depending on your audience. A person from Orlando, FL will likely have a different definition of ‘warm’ than someone from Juneau, Alaska. You need more facts than just the air temperature to best assess the situation and make a comment that fits the scenario. Recently, RealtyTrac LLC. released its recap of U.S. foreclosures for the United States, during the 3rd quarter of 2013. The report found there were 131,232 properties indicating a default notice, scheduled auction, or bank repossession during September. On the surface, this may appear like a lot of properties, or referring back to our weather analogy, “warm”. In actuality, we need to view it in context of where the U.S. real estate and mortgage industries have been over the past few years. This number actually represents a...
Understanding Documents and Processes: Deed of Trust
In many cases the Deed of Trust is presented as an “offering” by a party that has an interest in presenting the investment in the best possible light through a sales department or Broker, both of which are commissioned on the dollars brought in.   In this quest to get the dollars from the investors to earn the fees, many times the documents and process are over-simplified to reduce objections and shorten the fund raising process.  Missing, inadequate documentation in Trust Deed investing carries a high potential for unnecessary litigation and or principle loss from the investor if the borrower defaults or the Mortgage Broker closes its doors. The documentation an investor needs generally falls under one of a two categories; Borrower and Property. Borrower documents include;
  1. Completed loan application,
  2. Credit reports, credit history verification or references,
  3. Income documents, financials, Tax Returns,
  4. Use of Funds plan (from the proposed Deed of Trust),
  5. Exit...
Property Valuations, Loan to Value
In private lending where loan to own underwriting is very prevalent this category has the greatest pressure on it for manipulation to get the loan closed.  Proper valuation of a property to base the Deed of Trust on is a basic aspect of underwriting, however this seemingly easy item can be very murky for investors, especially if Real Estate is not your fulltime occupation with a few hundred transactions in experience.  Any estimate, valuation or appraisal of Real Property is only an estimate.  One does not need to hold any particular license to hold a different opinion of a property at any given time. Value is difficult in slow moving markets as there is limited (market) data to review in closings to estimate value and in rapidly changing markets some will lean toward on the side of where the market came from (past) and some will...
The Pitfalls of Commercial Real Estate
This PITFALL is more of an existing myth in the market place than an action or inaction on anyone’s part.  A common theme among Real Estate Brokers, Mortgage Brokers, Salespersons and investors is the belief that commercial properties are more consistent, predictable, less volatile and generally safer than other types of Real Estate properties.  This is based on the core assumption that the players in the transaction are more sophisticated due to the size of the transactions and the financial qualifications. In recent history; the S&L crisis of the late 1980’s early 1990’s and the unfolding commercial collapse of the late 2000’s is clear proof that this irrational belief of a greater financial stability in commercial Real Estate is largely unfounded.  Indeed, commercial exposure is a major contributing factor in the collapse of hundreds of regional banks nationwide. Commercial is just as susceptible to all market conditions...
Taking a Good Attribute and Distorting it with the Deed of Trust Originator and the Borrower
An industry standard is for a Broker to strengthen the offering (to Investors) of the Trust Deed to investors by creating an interest reserve for the borrower.  An interest reserve account is money set aside to ensure the investors interest payments on a loan over a specified term.  This can be a good feature in the correct circumstances; however often times the actual source of the interest reserve and the math is not to the benefit of the investors and this may hide the weakness in the borrower’s cash flow and qualifications. The PITFALL occurs by a taking a good attribute and distorting it with the Deed of Trust originator and the borrower.  For example: Borrower acquires a parcel of land for $100,000 with $50,000 down payment.  This land later ‘appraises’ for $500,000.00 based on that value; Borrower requests a loan of $375,000 (75% LTV) The investor is offered...