It is been heavily report lately that investors are on the rise in Sacramento. With Sacramento having one of the highest foreclosure rates in the country, it makes sense. Distressed properties make up approximately 70% of the market (REOs/Short Sales). With the rental market on the rise, investors are trying to obtain a steady stream of rental income.
If you have been thinking about becoming an investor yourself, here are some things to consider:
- Determine how much money you want to spend on the investment property.
- Most investors pay all cash because cash offers usually take priority in a multiple offer situation.
- If you would like to leverage your money, you can also obtain financing. However, to get a better interest rate, you need to put down at least 25%. For multi-family properties it can be anywhere from 30-35%.
- Most investors look daily for properties, so you need to have a good Realtor working with you to stay on top of new listings.
- Work with your Realtor to determine your ROI: 1) How much are other rentals going for in that area?; 2) How much will it cost to make the property move in ready (meaning what needs to be fixed)? 3) What are the ongoing fees? (HOA, Mello Roos, Taxes, Utilities, Garbage, etc.); 4) If you plan to hire a property management company, you can expect to pay 5-6% of gross income. 5) Don’t forget to account for vacancy rate and advertising! You should be looking for at least 5% ROI.
- Good deals go fast–usually within the first week of listing. However, if you are a new investor, make sure you see enough properties to understand the market before diving into anything.
- If plan on renting your investment property, make sure you understand the Landlord/Tenant laws by reading up online and consulting with an attorney. This step is crucial because one bad decision could land you in court with massive legal fees.
Bottom Line: There are some really great deals out there for people wanting to invest in real estate. Properties are basically 50% off right now. And if you plan to finance, interest rates have never been lower.
Posted by: Sheri Negri
Does it pay to advertise on Facebook? Some people might say yes. I guess it depends on the type of business and how much money the business is willing to pay. I personally do not see the value unless you are already well-known brand and you are paying for impressions to keep your brand out in the forefront.
Ad rates are getting more expensive, so you better have a big advertising budget. You can also get burned by not choosing the proper demographics. Some experts say you should expect to lose money your first time out of the gate, if you choose to use Facebook as a form of advertising. Even if you do get the demographics right, some never see results! Who actually pays attention to the Facebook ads anyway? I personally think ads on Facebook are annoying.
Why pay for an ad, when you can advertise your business via a fan page for free! With a fan page, you have the ability to create custom tabs which make your fan page look similar to a website if desired. You can make one of the tabs your landing or welcome page. Other tabs can be customized based on your type of business. It’s easy enough to do on your own like I did, or you can find templates online to use online. Here is one that I found in my search that you can use: www.facitpages.com.
For those of you interested in seeing what I did with my fan page, here is my link:
The only custom tabs I have currently are my Welcome tab and Realty Services tabs.
Posted by: Sheri Negri
If you’re considering buying a home, securing a mortgage loan is a key part of the process. However, you’re probably wondering: how do I find the best mortgage loan for my financial needs? Generally speaking, there are two types of mortgage loans:
- A fixed-rate mortgage offers a rate that stays the same over the life of the loan. This type of loan generally has a longer term and may be good if you plan to own your home for a long time.
- An adjustable-rate mortgage offers an interest rate that adjusts based on market conditions (it goes higher or lower) after a specified time period. This type of loan may be good for people who need an initial lower monthly payment.
Consider the following factors to help you gain insight into the kind of home you can afford, and the type of mortgage that will best fit your financial situation:
How long do you plan to own the home?
- Some loans have longer terms (from 15 to 40 years) that typically work well when you plan to stay in the home for a long time. Other loans have lower interest rates for a shorter term, and may be attractive if you plan to move in five to seven years.
- CONSIDER: How many years do you plan to stay in the home? Will you move within seven years, or is this the place to “settle down?”
How much can you afford as a down payment?
- 20% of the cost of the home is standard for the down payment on a conventional loan, but there are loans that allow you to put down as little as 5 or 10%.
- The higher your down payment, the lower your monthly mortgage payment will be.
- CONSIDER: How much can you realistically afford as the down payment?
What is the general price range for other homes in your neighborhood?
- How many homes are for sale in the area? How are they priced? Do you have a list of comparable properties?
- Are there other neighborhoods that catch your eye? How are the homes in these other areas priced?
- CONSIDER: Which area/home features the best combination of location, quality, and cost for you.
Which of the following is more important to you?
- To have low monthly payments?
- To pay less over the life of the loan, even if monthly payments are high?
- Some loans offer lower monthly mortgage payments over a long period of time. Other loans are designed to be paid in a shorter time frame, but have higher monthly payments.
- CONSIDER: Which situation would work best for you? It helps to be clear about your financial goals and resources.
Your credit history
- Mortgage lenders will look at your credit history and credit score to determine your track record for paying off debt.
- CONSIDER: Do you have a good credit score? Review your credit report to find out.
Posted by: Sheri Negri