“On The Road To Building Prosperity Investing In Real Estate in 2014” 1-4-14
Highlights from today’s podcast:
Questions answered by Richard Scarbrough:
- 1. What are the non-financial advantages to buying real estate property?
- 2. What are the financial advantages for buying real estate?
- 3. What is Memphis Investor Group and what does this non-profit agency have to offer a real estate investor?
- 4. Why do you PERSONALLY invest in real estate?
- 5. What type real estate is the safest money-maker?
- 6. What stories can you recount that illustrates the principles you are sharing?
Questions answered by Jo Garner
- 1. What are the basic conventional guidelines for real estate investors using traditional financing to purchase rental property
- 2. What other sources of financing are available to real estate investors?
Real Estate Tip of the Week: Richard Scarbrough shares tip and discusses advantages of self-directed IRAs
Good morning Memphis and across the country to IHEART listeners. Happy New Year and its going to be a great one. You’re on the Real Estate Mortgage Shoppe program and we’re here today to talk with you about whatever real estate topic you want to discuss. Call us on the air at 901 535 WREC. The on-air number to call again is 901 535-9732. Our general topic today is on “Building Prosperity Investing In Real Estate in 2014.” I’m your host, Jo Garner, mortgage professional with Evolve Bank and Trust. Co-hosting today we have a real estate investor and realtor who has done hundreds of real estate deals in the Memphis area, Richard Scarbrough of First National Realty.
Richard, its always a pleasure having you on the show. You’ve been a successful real estate investor for about 30 years in the Memphis market. Tell us a little about yourself and your advice to other real estate investors.
This week has been very quiet for mortgage rates. The people who buy mortgage-backed security bonds are still in vacation mode. However, we are expecting to see mortgage rates get active next week when the market is back in full swing. Its anybody’s guess which way mortgage rates will go. Some market experts say that the mortgage rates have already adjusted upward to compensate for the Federal Reserve tapering THEIR bond buying. Others say the rates have room to spike even higher. Yesterday the market closed with the 30 year fixed rate at around 4.625% with no points. The FHA & VA government loan rates came in around 4.25% no points and the 15 year conventional loan around 3.5%. Rates vary with credit scores and other factors. You can still get a lower rate it just costs a little more.
The real race is to get your loan approved before the government agencies clamp down even more on loan regulations and their attempt to increase minimum down payment requirements which affect up to 75 % of homebuyers. Mortgage Banker Association president, David Stevens says loan regulations have gotten TOO tight, because they are barring too many qualified borrowers from entering the market.
Richard makes a remark about rates still being good and prices on properties still being profitable or investors……and more on Richard’s outlook for investing in real estate in 2014.
My assistant Susan Belew and I have been busy helping people with financing to BUY houses as well as refinance them. We can do loans on a primary residence, second home AND investment properties. This year we have worked with more real estate investors and self-employed borrowers with good credit who have been turned down at other banks for lack of verified income. We have found income in the back pages of their tax returns to get the loan approved so they can buy property or refinance their properties. With tighter loan restrictions coming into play, it will be more important than ever for you to work with an experienced loan officer and realtor to get around some of the regulation boobie traps. Susan and I will take the extra time and effort to find the extra income you need to qualify. If you want to talk with me more directly and off the air, just give me a call at 901 482-0354. That number again is 901 482-0354 or catch me on my blog www.mortgageloansblog.com
The biggest dollar savings Susan and I have seen are from homeowners refinance and lowering the rate but also shortening the term on their mortgages. They can save tens of thousands of dollars by lowering the rate and shortening the term. The real bonus is lowering your interest rate, shortening the term on your loan AND still getting a lower monthly payment. A big portion of our customers have had changes in their lives and just need to lower the rate and go back to 30 year term again. Customers who just need to lower their monthly payment are people who have lost some income when they switched jobs, single parents going through a divorce, people with children going to college or older clients wanting a lower payment after they retire or small business owners looking to free up funds each month in case of a financial emergency, and the list goes on. When that is the case we are happy to give them an amortization schedule and show them ways they can still pay off their mortgage early if they choose to do so. Then there are our customers who are out buying their primary residence or adding to their real estate portfolio of properties while real estate is being sold at a bargain with lower than normal interest rates.
Richard makes comments about the ability to build equity in real estate investments and can make other comments too about investors qualifying for loans or using other sources for money when it is necessary etc
(Jo) There is a saying and I don’t know who said it, but it goes like this: “The difference between who you are and who you want to be, is what you do.” That’s true in life and in your real estate investments. So to break it down, the first question is “Who are you right now?” The second question is “Who do you want to be?” Now—What actions do you need to take to move from where you are now to where and who you want to be?
During the 2nd segment of the show, Lynn McDonald of Allstate Insurance sponsored our Kindness Korner as a Kindness Revolution official representative. She honored our a real estate professional Kindness Korner recipient who has been exceptionally kind and giving to others and in the community. Lynn issued the Spirit of Kindness award to Richard Scarbrough.
“The Kindness Revolution™ is a national not-for-profit initiative headquartered in Memphis and active in over 150 cities across the country. Their mission is to raise the awareness of values, such as kindness, in leadership, customer service, schools, and communities. One of the ways they do this is to recognize the kindness of local citizens, such as Richard Scarbrough, investor and realtor “Richard Scarbrough represents the values that we deem so important to our children and our communities and we would like to join in this recognition” from Ed Horrell…Founder and President of The Kindness Revolution™.
Questions answered by Richard Scarbrough:
- 7. What are the non-financial advantages to buying real estate property?
- 8. What are the financial advantages for buying real estate?
- 9. What is Memphis Investor Group and what does this non-profit agency have to offer a real estate investor?
- 10. Why do you PERSONALLY invest in real estate?
- 11. What type real estate is the safest money-maker?
- 12. What stories can you recount that illustrates the principles you are sharing?
Questions answered by Jo Garner
- 3. What are the basic conventional guidelines for real estate investors using traditional financing to purchase rental property
*if you do not own over 4 financed properties and you want to buy a single family rental property, the minimum down payment is 20% . If you are short the full 20%, I may be able to show you other sources of funds you can use for the down payment.
If you already own over 4 financed properties, you will need to show more reserve funds left in savings, presumably because you could have more unexpected expenses if you own a lot of property and would need more savings in your emergency fund. Your mortgage rate may be a little higher than if you owned less than 4 financed properties. At the current time I can work with investors with up to 10 financed properties on traditional conventional financing as long as the loan we are doing does not take them over 10 financed property limit. If you are just starting out and you have a spouse who is investing with you, you may want to consider not owning or financing investment property jointly so that each one of you could acquire up to 10 financed properties EACH individually before you would be forced to go to alternative lending sources which could carry higher interest cost.
Traditional mortgages to buy or refinance rental property usually have much lower fixed rates than alternative sources of funding AND the traditional mortgage will go out to a full 30 year term, making your mortgage payments extra low and giving you a lot more positive cash flow when you rent to tenants.
- 4. What other sources of financing are available to real estate investors?
HELOCs on primary residence or other properties
Margin loans on tradable securities not in a retirement fund.
Loans from your 401k secured on your 401k funds
Funds from the sale of a different asset, like a different house, a car, motorcycle etc
A partner on a real estate investment property who can get financing or offer to write a check for the down payment for an ownership stake in the deal
- 5.
Real Estate Tip of the Week: Richard Scarbrough has about 1.5 minutes to share a practical tip.
Jo has 2 announcements: Talk Shoppe offers free networking and education to anyone interested in real estate or business. This Wednesday January 8th 9A to 10A at DeVry University 6401 Poplar Ave, Mark van Stolk, business coach with Calaveras Business Coaching will be showing us how to Learn, Act and Stand Above the Rest in our businesses. Mark is my personal business coach and I want to thank him for helping me take my business up several notches quicker than I could do on my own. For more information about Talk Shoppe go to www.TalkShoppe.BIZ.
Next Saturday right here on the Real Estate Mortgage Shoppe Tom King, the certified Shelby County real estate tax appeal expert with King and Vaughan Consulting will be co-hosting with me. You’re invited to join us for a trivia contest called Look Back Memphis. The winner gets a $25 gift certificate. For today’s podcast and others go to www.mortgageloansblog.com
Transition Songs: “Brave” by Sara Bareilles; “Wake Me Up” by Avicci; “Roar” by Katy Perry
Lynn McDonald, Allstate Insurance (901) 849-7101
Richard Scarbrough, real estate investor and Realtor (901) 489 2979
Jo Garner’s Bio
www.MortgageLoansBlog.com www.MoneyShoppe.NET (901) 482 0354 jogarner@mindspring.com
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 17 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.BIZ She is currently the host of the Real Estate Mortgage Shoppe program 9A-10A CDT Saturdays on News Radio AM 600 WREC and IHEART Radio http://www.iheart.com/#/live/2145/?autoplay=true and currently publishes on her blog www.MortgageLoansBlog.com
For real estate financing solutions, plug into the Real Estate Mortgage Shoppe program. You can find mortgage rates, FHA Streamline refinance with no out-of-pocket costs, refinancing options, home purchase loan programs, answers and real estate, money-saving tips and more.