Pyriel Real Estate Corner

[pyriel]

Hi all! I will be in Orlando Florida next week but I just want to give an update on that 5 bedroom purchase. We will be closing on it on 26 March when I get back from Florida. We have some renovating that we need to do so I need to start talking to contractors about them. RE is really a boring business. It can take weeks/months/years for a single transaction to actually transpire. But that is ok, you should all take your time before purchasing to ensure that you know what you are getting into.
Good luck to all...

P

 

[pyriel]

Hi All!!! Its been awhile. I haven't been posting much lately due to very busy schedule. Anyway, RE is really getting some pounding in the mainland and i'm sure that it will finally make its way here on Guam as well. In the meantime, RE here is still ok but I am more cautious and beginning to settle down and getting ready for the long haul.

We did closed on the 5 bedroom house on April but problems keep popping up in the paperwork such as wrong SS# or the forms were missing. We reconvened and finally got it all signed by the first week of May. Just in time for my bday (13th). So I consider this my bday gift for me. Renovation as I estimated would cost me another 15k and we should be ready to put it in the rental market by next month. My projected rental is $1600 with mortgage/insurance/tax coming to about $800 every month. Closing cost me about $4500 so I have a total cash lay out of about $20k.

I've been reading lots of RE disasters around the US. I feel sorry for those individuals that leveraged their homes and utilized those extra money to purchase nice to have things. Alot of speculators also got hit when the RE climate suddenly shifted. This is the reason I always advocate that RE is for a long haul. Yes, it is profitable to flip but it can also turn around and bite you if you are not prepared for the worst case scenario.

Good luck to all. This might be the last purchase I will make for awhile. I am refinancing my home as well and consolidating my loans by restructuring them. Stay focus and be safe...

P

 

[pyriel]

http://www.guampdn.com/apps/pbcs.dll/article?AID=/20070524/NEWS01/705240304

Japan commits 6 billion of the 10 billion. to relocate the marines from Okinawa to Guam. US will foot the other 4 billions. I know that RE is not doing well among other regions but it seems like Guam will be shielded for several more years....

I am optimistic but also reluctant to buy more for the pricing seems to be skyrocketing (due to speculations). I can see more people purchasing because of this which would drive the market up even more. I will use this time to start the reorganizing and refinancing my assets.

Take care all...

p

 

[pyriel]

http://money.cnn.com/2007/07/05/real_estate/futureshock_Florida_housing_will_fall/index.htm

It seemed that foreclosures around the nation are going up. These people are speculating around Dec or Jan drop. Anyone know why? Winter RE sell is usually the lowest selling season, couple this with pending foreclosures, well, you can see the worst case scenario. The good thing about this is that it becomes a buyer's market. So those who are sitting on the sideline, watch out, an opportunity is about to come your way;-)

P

 

[Miss_Piggy]

Great US Map on Subprime Mortgages

http://www.nytimes.com/interactive/2007/11/03/weekinreview/20071103_SUBPRIME_GRAPHIC.html?hp#

 

[pyriel]

Well, foreclosures are doing its job and it is now a buyers marker out there. Those who have been waiting to jumped in to RE are finding some good deals. Speculators have lost much but for those who have studied RE will find this time to be a rewarding time. Remember, you get the most gained when you buy during the downturn. Makes me remember the 160k 8 unit apartment I bought in March 2003 which is now appraised for more than 500k.
Please be careful out there. The market is very unforgiving, especially for those speculators that are overextended.

Pyriel

 

[Asylum]

Well, foreclosures are doing its job and it is now a buyers marker out there. Those who have been waiting to jumped in to RE are finding some good deals. Speculators have lost much but for those who have studied RE will find this time to be a rewarding time. Remember, you get the most gained when you buy during the downturn. Makes me remember the 160k 8 unit apartment I bought in March 2003 which is now appraised for more than 500k.
Please be careful out there. The market is very unforgiving, especially for those speculators that are overextended.

Pyriel

Be very very very careful!

I am a home builder I am seeing fully qualified buyers with steller credit and positive debt to income ratios take weeks to get approved. Long gone are the days of the fast-flip. Be preparded to sit on a property for months awaiting a sale.

 

[GUCHI]

asylum
i know exactly what u mean i have a house for sale its been 8 months !!! and noone has even made an offer. it was only shown twice in that time.Heeeeeeeeeeeelp !!!

 

[Asylum]

asylum
i know exactly what u mean i have a house for sale its been 8 months !!! and noone has even made an offer. it was only shown twice in that time.Heeeeeeeeeeeelp !!!

sorry... but I'm sure it's going to get worse before it gets better.

 

[luv2read]

sorry... but I'm sure it's going to get worse before it gets better.

and that means a lot coming from someone actually "in the business.":worried:

 

[GUCHI]

luv

thanks for makin my day !!!!!! LOL LOL just kiddin it is what it is.

 

[pyriel]

Hello all,
I totally understand what Asylum is referring to about banks tightening their belt and looking at the loan application with a magnifying glass. However, these loans are usually coming from new or secondary homeowners. I remember when I first bought my first property, it took 3 months before I finally signed on the dotted line. However, after doing my due diligence and proving that i could turn an ugly duckling house into a beautiful swan, getting a mortgage became easier. It is also the way you package your financial asset that the loan officer would see. Before I buy a property now, I usually sit down with several loan officers from different banks and show them my financial statement. To tell you the truth, in many occasions, I had to explain to them how to read a financial statement. Bottom line, the numbers won't lie and once they see the "net worth" they become pretty friendly.
Here are 4 RE investors:
1. Homebuilders that builds and sells home. If you have the asset to back you up, heck you can make a lot of dough from building home.
2. Passive investor that buys, fix, and rent homes or apartments. I fall into this category.
3. Flippers just like homebuilders can be lucrative however many novice investors try to be flippers without the asset to back them up and stay for the long haul. As a result, they end up foreclosing or losing out on a deal just because they can't keep the the monthly mortgage or loan.
4. Developers are those that have seen it all. These guys know the intricacy of government requirements.
Keep in mind that maybe flippers could fit into Asylum's category. I never ever consider a homeowner an RE investor since its not putting money in people's pocket (at least not until you sell).
Please be careful out there...

Pyriel

 

[Gilligan]

...To tell you the truth, in many occasions, I had to explain to them how to read a financial statement. Bottom line, the numbers won't lie and once they see the "net worth" they become pretty friendly....
Pyriel

Sometimes a loan officer will ask me, "Mr Gilligan, you show your net worth is $$$$$ but your government salary is only $$, how can that be?" I simply answer that I invest in assets and not liabilities. Like Rich Dad would say, "Assets puts money in your pocket and Liabilities takes money out of you pocket."

Here is a link for the SBA's financial statement:
http://www.dola.state.co.us/dem/sba_declaration/SBA Personal Financial Statement.pdf

 

[XL-entLady]

To tell you the truth, in many occasions, I had to explain to them how to read a financial statement.

As part of my job I have to review the financial statements of private companies. It is amazing to me how many companies don't know that Balance Sheets have to balance! :blink:

If you have something, you either owe money for it or you own it outright. Hello-o-o! Assets = Liabilities + Owner's Equity. How hard is that? :nuts: Makes me nuts!

Of course, driving me nuts is a short trip!

Lady

 

[Guest2]

As part of my job I have to review the financial statements of private companies. It is amazing to me how many companies don't know that Balance Sheets have to balance! :blink:

If you have something, you either owe money for it or you own it outright. Hello-o-o! Assets = Liabilities + Owner's Equity. How hard is that? :nuts: Makes me nuts!

Of course, driving me nuts is a short trip!

Lady

Maybe thats why businesses fail at such a alarming rate in this country.
1+1=2 doesn't count anymore (pun unintended). A+B=C leaves one to
find the value of A&B, A&C, B&C. Damn that new math is tough. Ooops,
I sound like my parents. I think I'll stay in my Gov't job, alls I have to do
is count inmates. What comes after 1215, damn ! Where's my calculator
when I need it !
:nuts:

 

[pyriel]

Glad to be out of Afghanistan back with my family. The market sunk while I was gone and if I had stuck with my strategy (100% stock Nov-April/100% G Fund May-October) I would have been ok. Too bad I didn't have the connectivity at the place where I was deployed. But that is ok... What comes down will also go up (slowly;-)

It seemed like the housing market is on sale bonanza... I wonder how many of our members plan on purchasing properties next year? I'm sure lots of them have questions whether they should buy or not. As for me, i'm in a holding pattern. I'm waiting on what Obama will do about this economy. My plan is to stay put for 09 and save as much as I can for future real estate investment. No need to hurry now since we should have 2-3 years of cheap housing market being available.

I was fortunate enough that my wife was able to take care of our rental properties while I was gone. She did a great job keeping all units to occupied. The Marines transfer to Guam from Japan has been pushed back for a couple of years so Guam is also starting to see overbuilding and it is becoming to be a renter's market. Till the Marines start arriving, things will be a little tight.

There are lots of options to implement to ensure all units are fully rented. Incentives that takes away profit are necessary evils to attract tenants. The alternative could be devastating if proper planning is not implemented (just look at what is happening around the country now). I continue to look at section 8 as a viable pool of tenants. However, I am seeing that the market demand is for 4-5 bedrooms rental units. 2 bedroom units just like my 8 unit apartment is seeing a longer turnover than the single housing units that I have (tenants stay longer too). So, some of my options are to turn the 3 bedroom single residential units into 4-5 bedroom units which could command higher price in the section 8 market and/or renovate the 8 unit apartment and turn it into a 4 unit 4-5 bedroom units. All these options, required initial funding and with the uncertainty of the market, a wait and see attitude is the best strategy I could come up with.

Appraisal value is also another avenue that is worth looking into. It seemed that values of my properties are in an all time high and it might be a good idea to reconsolidate and refinance. I haven't seen the numbers yet, but if I decide to do it, I definitely will not be getting extra cash and use them for something else.

Working with real estate is different from each place and from each individual. My wife and I are fortunate to have government jobs that allows us to take over payment of all rental properties even if they all become vacant for some unknown reasons. Not everyone has this kind of luxury and this is why we are seeing lots of foreclosures all over the US. People are just prepared for the worst case scenario.

I do hope that everyone continues to be proactive with their investments. Always be careful and always be safe. Continue to come and participate with this site. Continue to help us help each other.... TY

Pyriel

 

[GUCHI]

pyriel/MB
a mortgage broker told me that interest rates could hit 3-3.5% within the next 90 days, have u seen any indications to justify those numbers ??? i'm looking to refinance and combine if I can 2 home loans.

thanks
guchi

 

[GUCHI]

PYRIEL/MB
does anyone know which bank is better to deal with refi on a rental prop. ????? my bank is willing to give me a 4.3% refi on my rental, but i don't want to bite the first rate I get.
thanks

guchi

 

[Elgallo]

Guchi: What part of the country are you in? I just got a 4.875 quote on my principal residence at a 45% LTV. Typically, interest on NOO (Non Owner Occupied) property is higher. I live in CA.

 

[GUCHI]

el

i'm in N.C. i just talked 2 my bank today and set up an appt. for fri. to go over the numbers. this is with the bank i deal with.