In today’s show we will be showing you ways to finance your home foundation or other repairs if you have some equity in your home or if you don’t have equity in your home. Clint Cooper of Redeemers Group, a foundation repair company, will be sharing with you signs to look for when your house has a serious foundation problem and what to do to fix it.
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To Your Success,
Jo Garner, Mortgage Loan Officer NMLS# 757308
(901) 482-0354 jo@jogarner.com www.JoGarner.com
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Good morning, Memphis! Welcome to our internet listeners and podcast listeners across the 50 states! You’re on Real Estate Mortgage Shoppe. I’m your host, Jo Garner, Mortgage Loan Officer. You can connect with me at www.JoGarner.com. Our general topic is FINANCING YOUR HOME FOUNDATION REPAIRS-STANDING ON SOLID GROUND.
If you have a question or comment text me now or call me directly off the show at (901) 482-0354. You can call us while we are live at (901) 535-9732 or outside the Memphis area (800) 474-9732 Today is June 10th, 2017.
HERE’S WHAT IT IS ABOUT
Today I will be covering some ways to finance your home foundation or other repairs if you have some equity in your home or if you don’t have equity in your home. Clint Cooper of Redeemers Group, a foundation repair company, will be sharing with you signs to look for when your house has a serious foundation problem and what to do to fix it.
ABOUT CLINT COOPER
Clint Cooper has been in the foundation repair business since 2007 and has published several articles on his areas of expertise. He wrote the book “Mold Prevention Science” which is used by the entire Basement Systems and Foundation Supportworks’ network of dealers for educating their clients about mold and mold prevention. Clint, I was reading in the Memphis Business Journal where you won Executive Of The Year out of 17,000 Mid-South businesses. Take a minute or so and tell us a little more about yourself and what you do for your clients. <Clint introduces himself and what he does for his customers-foundation work>
MORTGAGE MARKET
(Jo) There’s not a lot of ground shifting going on right now in the mortgage interest rate market. Investors seem to be anchored down waiting for the Federal Reserve’s action next week along with some other economic reports. The 30 year conventional fixed rate is close to the lowest it has been all year even after prices started inching up the last couple of days. They are hitting around 4% to 4.125% with no points in a lot of cases. The conventional 15 is still bumping along in the low 3’s. Many of the other mortgage products are similarly low. Here’s a word to the wise: MAKE YOUR PLAN. LET’S WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, LET’S DO IT TODAY. But you have to talk with me personally so I can work with you directly. Call me at (901) 482-0354 or let’s connect at www.JoGarner.com
FOUNDATION PROBLEMS HELP INVESTORS TO SOME SWEET DEALS
(Jo) Since we are talking about home foundations today, here’s another bit of wisdom from successful real estate investor, John Majalca from the San Antonio area. He got started investing in 2001 and retired in 2006 with $35,000/month in income—that’s $35,000 per month in income.
He was not afraid to buy homes with foundation problems at a deep discount, fix the problem for a fraction of the value and rent the house at the top rent rates. John told Inman News, “One man’s issues are another man’s opportunities.” I found this statement to be true when I bought my first house.
The first house I bought for my own home back in the early 90’s was a foreclosure that had been sitting on the market for a couple of years. The concrete floor in the kitchen dipped slightly toward the back door. Investors were afraid of it. It needed quite a bit of clean up and some other work too, but the price was well below the market price for houses like that in the area. The neighbors were great too.
I hired a reputable engineer and got a bid from a contractor for the other work. The engineer walked around the property with his clipboard and measuring tape, bent down and inspected the problem area. When he stood up he pointed at the floor and told me, “There is nothing structurally wrong with this foundation. It will be here long after the house is gone one day.” He laughed and said, “It just looks scary.”
Because it looked a little scary, I was able to buy the house for almost 50 cents on the dollar. I spent a fraction more to have the floor leveled and the other fix ups done. After 12 years I had the house paid off and sold it for over double what I paid for it. A very sweet deal!
HOME EQUITY LINES CAN BE AN INEXPENSIVE FINANCING FIX
(Jo) When you have plenty of equity built up in your home where your house is worth a lot more than what you owe on it, it is usually fairly easy to get a Home Equity Line of Credit (HELOC) to cover the foundation repair costs. Home Equity lines of credit are usually interest only with rates a little over prime making them very affordable.
For example, if your house was worth $175,000 and you owed about $130,000 on your first mortgage, a bank would probably be willing to loan you up to a total of 90% combined-loan-to-value. You would still have your first mortgage of $130,000 in place with up to about $27,500 on a line of credit. If your repair only costs $5,000 or up to $10,000 that is really all you would need to borrow. Your interest only payment at around 4% would be about $35/month on the $10,000 draw.
Closing cost on a second mortgage Home Equity Line of Credit are fairly low depending on the dollar amount of the line of credit. Beware of rising prime rates, though. Your home equity interest rate would go up every time prime went up. If you have a large amount of your mortgage that is currently a variable rate, let’s talk. You may find refinancing your home to one low fixed rate would let you sleep better at night. Call me at (901) 482-0354 or connect with me at www.JoGarner.com
Stay tuned. Later in this show I will be sharing with you some financing solutions you can use if you have a lot of equity in your home or even if you don’t. Clint Cooper of Redeemers Group will be up next to show you what signs your house will give you indicating a more serious foundation problem. Clint won’t just tell you how to find the problem, but he will tell you how to fix it.
2nd segment after 9:15 break: Our Look Back Memphis Trivia Contest is brought to you by notable Memphis historian, Jimmy Ogle. Jimmy Ogle offers free historic walking tours downtown in the spring and fall. For information about Jimmy Ogle, go to www.JimmyOgle.com . The Look Back Memphis Trivia Contest is sponsored by John and Jennifer Lawhon of Lawhon Landscape (901) 754-7474 the Lawhon’s can help you plan your landscaping if you have a BIG, BIG project or a smaller project . The Lawhons are giving away a $25 gift card to the first person with the correct trivia answer. If you know the answer to our trivia question, call us at 901 535 WREC 901 535-9732.
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QUESTIONS ANSWERED BY CLINT COOPER :
Topics:
- Rainy season and the affect it has structurally
Jo: We are in a rainy season right now. How does that affect people’s homes?
Clint: Discusses how the ground swells and foundations begin to settle. Symptoms of structural issues begin to appear.
Cracks in the brick and foundation of your home, doors that suddenly do not close, windows that suddenly stick, uneven floors
- Rainy season and the affect it has in basements and crawl spaces
Jo: We have far more homes in the area that have basements than what people may think. Do you see a lot of people that are battling water in their basement during this rainy period?
Clint: (Focus on basement and crawl space) Regardless of a building’s foundation type, slab, crawl space or what we call conventional or basement….. water causes problems.
Tip-install gutters with extensions to divert water away from the foundation
Speaks to- basements and how we need a focus of diverting water, why, etc.
Speaks to – the issue with crawl spaces filling with water
Getting rid of the water after it enters the basement
- Redefine movement
Jo: When you were here in January, you shared with us something that has been going on in your company that you called a REDEFINE movement.
Clint: This is something we are really excited about. We have been blessed to grow very quickly, and we want to make sure we are smart about it as well. We don’t want to just complete projects and move on, and be an ok place for employees to work. We are passionate about Redefining our industry. When we say that we mean the contracting industry. Most people have had experiences with contractors in their homes, and it isn’t often that you hear that the experience was stellar. More often you hear about unreturned phone calls, contractors not showing up on time or at all, doing a mediocre job, and the list goes on. The saddest part of that is that, as homeowners, we have come to accept that as part of working with contractors.
We think that’s ridiculous. We believe that customer experiences should and can be remarkable. We want to redefine customer expectations in our industry, leaving no room for expectations of mediocrity.
Beware of squirrely structural inspectors
Get a qualified inspector –avoid squirrely inspectors
Clint: This also applies to our employees. Every one of us has had bad jobs, and bad bosses, and have been in work situations where we feel like we are just a means to an end. We believe we have a responsibility to our employees to help them see a better version of themselves, and we bestow the gift of high expectation on them. We believe if we create an environment where employees feel a burning passion and fulfillment from their work, they go home to create a happier family. Happy families create happy neighborhoods and happy communities.
Jo: I heard something about you recently… that you, just a few weeks ago were named the Executive of the Year by the Memphis Business Journal out of something like 17,000 businesses in the mid-south area. You mentioned to be that you are growing quickly and with that comes new positions that you have to fill. What openings do you have that you are trying to fill?
Clint- fair to say we are always looking for people that have the mindset and belief that we can redefine our industry, and our open positions are always listed on redeemersgroup.com. Right now we are really focused on bringing a new Service Manager on board, as well as hiring additional crew members and project foreman. The details and the option to apply are found on our website under the About Us < Job opportunities section.
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QUESTIONS ANSWERED BY JO GARNER:
- You have always offered your mortgage clients a variety of financing solutions depending on their situation when it comes to getting their homes repaired. What are some of the most popular ways people finance home repairs?
The home equity line of credit is the most popular method I see used by people to finance small to medium sized home repairs. We talked about how the home equity line of credit (HELOC) works if you have built up some equity in your house. In other words, your house value is much greater than the amount you owe on your mortgage.
For example, your roof is old and starting to sprout small leaks here and there. You decide the carpet is about as old as the roof and is starting to look like the roof. If you replace the carpet, you might as well paint too and do a few upgrades in the kitchen and bathroom. Bob the Builder gives you a cost estimate of $20,000.
If you house appraises for $175,000 and you owe about $130,000 on your first mortgage, that means you owe about 76% of the value of your home. Most banks will give you an equity line of credit up to 90% of the combined-loan-to-value on your home. In your case, since your house appraises for $175,000 and you owe $130,000, you can likely get a line of credit for up to $27,500 if you wanted it.
$175,000 appraised value
$130,000 balance owing on 1st mortgage
$175,000 appraised value
X 90%
=$157,500-$130,000= $27,500 90% CLTV interest only payment approximately $96/month until the rates change.
Since a Home Equity Line of Credit usually has an interest rate of around prime + 1 or so, your rate would probably be close to 3.25% until the prime rate goes up again. If you borrowered $27,500 at 4.25%, you would be paying approximately $35/month interest-only. Second mortgage HELOCs usually have very low closing costs too.
Other ways to finance repairs on the home, especially if the repair bill is going to be large is to refinance the entire home paying off the first mortgage and getting enough cash out on a cash out refinance to get the money to do the renovations and repairs you want to do.
This can be done with a standard low fixed interest rate mortgage if your home is already in good shape and you have plenty of equity. If you have a hefty amount to pay to get your home renovated and repaired and the work you do will cause the appraisal value on your home to go up substantially, you may want to consider a special Renovation and Repair mortgage which will allow you to borrow some of the repair costs. There are some larger closing costs on these type loans but the interest rate is still a low fixed rate for 30 years, keeping your payments low. Call me and we can compare some financing ideas.
- How do you help your mortgage clients who need to do repairs on their house but do NOT have a lot of equity built up?
If the repairs are due to storm damage, sudden burst of pipes or something that a homeowner’s insurance policy would cover, I would suggest you call your insurance agent. Call your local agent first though instead of the 1-800 number because the agent can advise you, based on your policy, whether it is worth making a claim and risking your insurance costs going up.
- Next question is: “Do you have a home warranty policy?” The home warranty might pay for some of the repairs for just a small service fee.
Some of my mortgage clients own other homes with quite a bit of equity in them. If there is not enough equity in the home that needs repair, we have refinanced one of the other properties to get enough cash to take care of the repairs on the other house. There are closing costs involved with refinancing a first mortgage. Call me and we can compare the terms.
Borrowing against a retirement fund or other investment is another option.
Family gifts are nice.
I have a few more rabbits to pull out of the hat if the options I have already shared will not work for you. Call me directly after this show at (901) 482-0354 or connect at www.JoGarner.com . Subscribe to get the weekly podcasts and show notes from Real Estate Mortgage Shoppe by emailing me at jo@jogarner.com so we can stay in touch.
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ANNOUNCEMENTS:
- Talk Shoppe offers free networking & education to anyone interested in real estate or in business. Talk Shoppe meets every Wednesday 9A-10A CT at Nova Copy 7251 Appling Farm Parkway Memphis, TN. This Wednesday June 14th, 2017 Darrell Robertson of Tennessee Housing Development Agency will be talking about “How To Qualify For The THDA $15,000 Dollar Down Payment Assistance Program.” Talk Shoppe events are free thanks supporters like Eric Eurich, Kaizen Award Winning Business Coach with Focal Point Business Coaching and Talk Shoppe’s business coach too. https://ericeurich.focalpointcoaching.com/
- Thank you also to Talk Shoppe Strategic Alliance Partner Jana Cardona, Executive Director of West Tennessee and North Mississippi Business Network International. BNI can help you develop steady business through referrals. www.midsouthbni.com
- FOR THIS PODCAST OF REAL ESTATE MORTGAGE SHOPPE AND MORE, GO TO JOGARNER.COM
- Real Estate Mortgage Shoppe reminds you that IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.
SPECIAL NOTE: REAL ESTATE MORTGAGE SHOPPE RECOMMENDS THAT YOU CONSULT WITH A FINANCIAL, LEGAL OR OTHER CERTIFIED, LICENSED PROFESSIONAL BEFORE ACTING OR INVESTING ON ANYTHING YOU HEAR OR SEE FROM THE CONTENT ON THIS SHOW OR BLOG POSTS. THE INFORMATION WE SHARE ON REAL ESTATE MORTGAGE SHOPPE IS GENERAL IN NATURE MEANT FOR GENERAL EDUCATIONAL PURPOSES ONLY.
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REJOINERS:
Gwen Christensen, owner of Builders Floors and Interiors www.BuildersFloorsAndInteriors.com Gwen can help you with getting right flooring installed at less cost than the big box stores.
Kevin Yee, Save Energy Solutions www.sesinfo.biz Sealing your home’s ducts to keep bad air out and good air in. Great help to people suffering from allergies.
Sonia Balcer, Rocket Scientist Montrose, California
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About Clint Cooper
Facebook: Redeemers Group of Memphis
Twitter @redeemers_group
Instagram @redeemersgroup
- Clint was born and raised outside of Nashville, TN and is a graduate of MTSU.
- He served in Iraq with the Marine Corps Infantry before returning home to Tennessee to live and work in Memphis.
- In Nov 2007 he started Redeemers Group.
During his time with Redeemers Group, Clint has published several articles on his areas of expertise. Most recently his first book entitled “Mold Prevention Science” was published and is used by entire the Basement Systems and Foundation Supportworks’ network of dealers to help them communicate with their clients about mold and mold prevention. He teaches CE classes for Memphis Areas Association of Realtors several times per year.
He has also earned the following certifications and licenses:
- Basement Systems Waterproofing Certification
- Basement Systems Crawl Space Repair Certification
- Foundation Supportworks Diagnostics School Certification
- National Association of Mold Remediators and Inspectors License
- Blue Institute- LEED Training Certification, Member ID#:
- Green Building Council, Certification
- TN State Board for Realtors CE Authorized Instructor
Clint lives in Germantown, TN with his wife and two children.
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About Jo Garner
cell: (901) 482 0354
Twitter: @jogarner
Jo describes her job description: “As a mortgage loan officer, my job is to give my client the benefits they want from their financing terms– listening to my client and determine what’s of the most value to THEM– What is their comfort level on a house payment, how much are they comfortable paying down, what type of financing do they need to get the house they want to buy or refinance. Different clients have different priorities in life—some are buying their first home with very little down payment funds. Some are recovering from medical challenges, divorces or preparing to send children to college and some are embarking on a long term goal of buying properties to build rental income. Whatever their personal priorities are, my job is to put together a mortgage with comfortable terms that will help them achieve their goals.”
Jo Garner is a mortgage officer with extensive knowledge in tailoring mortgages to her customers who are refinancing or purchasing homes all over the country. She offers conventional, FHA, VA or other loan programs for refinancing and purchases.
Jo can help you look at rent vs buy, when it makes sense to refinance, how to get the best deal on your home purchase financing.
Jo Garner has been in the real estate/financing business for over 20 years. She got her start in Portland, Maine where she first began her real estate career. She received her real estate education from the University of Southern Maine and was personally mentored in San Diego, California by Robert G. Allen, author of Nothing Down, Creating Wealth and The Challenge.
On moving back to West Tennessee in 1987, she went into business buying and selling discounted owner-financed notes secured on real estate. In 1990 Jo went to work for a residential mortgage company and has been a mortgage loan officer for over 20 years. Her goal is to offer excellent, affordable service to her customers, tailoring the loan programs to the specific needs of her clients.
In addition to her work in the mortgage field, Jo Garner is the primary sponsor and founder of Talk Shoppe in Memphis. www.TalkShoppe.com Jo is host of Real Estate Mortgage Shoppe and currently publishes on her blog www.JoGarner.com