REAL ESTATE –-HOW DO I SELL IT, RENT IT –FINANCE IT?
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MARKET NEWS
LOOK BACK MEMPHIS TRIVIA CONTEST
QUESTIONS ANSWERED BY PHILLIP KEMP, REED & ASSOCIATES OF TN, LLC (PROPERTY MANAGEMENT)
QUESTIONS ANSWERED BY JO GARNER, MORTGAGE LOAN OFFICER
REAL ESTATE TIP OF THE WEEK
ANNOUNCEMENTS
QUOTE CORNER
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Good morning Memphis! Good morning across the country on iHeart Radio and BOCI Radio. You’re on the Real Estate Mortgage Shoppe program. I’m your host, Jo Garner, Mortgage Loan officer. You can connect with me on www.JoGarner.com or call me directly at 901 482-0354. If you have a question or comment and you’re on twitter, send it to hashtag #JoGarner or you can call me in the studio while we are live Saturday August 1st 2015 at 901 535-WREC 901 535-9732. Let’s talk about your real estate, your real estate financing—anything about real estate you want to discuss. Our general topic today is REAL ESTATE –-HOW DO I SELL IT, RENT IT –FINANCE IT? Sitting around the coffee table with me today is Phillip Kemp with Reed & Associates of TN, LLC. Phillip has 12 years of experience in property management and currently manages about 500 properties in Shelby, Fayette Tipton counties in TN and DeSoto County in Mississippi. 500 units—that equates to how many toilets, telephone calls and tenants? Wow! Phillip, tell our audience a little bit about yourself and what you do. <Phillip Kemp with Reed & Associates of TN, LLC shared what their property management company does for their clients. He covered what sets them apart from other property management companies using technology to offer better service.
- (Jo) As mortgage officer I think one of the most rewarding parts of my job is helping people on their journey to homeownership, whether it is someone who has been renting but really wants to own their own home and build equity for themselves or someone who has gone through an arduous divorce and is finally ready to own their own house again and the list goes on and on. My assistant Susan and I get to know our clients through the loan process and we celebrate with them on their closing day. We have been celebrating some lower mortgage rates too over the last couple of weeks, but especially yesterday when the jobs report came out causing the price on mortgage rates to drop. If you want to see mortgage rates this low you will have to flip or scan back to May 29th 30YR FIXED 3.875% to 4% range on the conventional 30 year fixed rate program, 3.125% to 3.25% range on the 15 year fixed rates. You can call me personally to get the FHA , VA, USDA and jumbo mortgage rates.
Phillip, I know you work with people who really do need to rent for the time being and you work with homeowners who are better converting their home to a rental to tenants rather than selling. What are you seeing in the rental market right now?
<Phillip comments on the fact that not everyone is in a position to buy a house at the moment and for those people where renting really works for them now –here are some positives and here’s some positives for people who are better served renting their house to tenants rather than selling it>–Relocation is a big reason for renting vs buying.
(Jo) Phillip, I was reading an article yesterday where Freddie Mac’s David Leopold said in their Executive Perspectives blog that rental housing is a growing burden on low wage earners and that more than one in every renter in the U.S. must pay over half of their family income to pay for housing and utilities. After the recession more low-wage jobs opened up but the addition of affordable housing didn’t open up to meet the need of that work force. In my 25 years experience as a mortgage loan officer I have seen numerous ways people have been creative in finagling methods to live affordably in relative comfort. Some people have shared housing with family or friends for a time while they saved money to buy a house or just got their income high enough to afford to buy and still keep a healthy amount going into savings. Others have studied the real estate market and purchased a home in appreciating neighborhoods using family gifts or down payment assistance. Others have bought a house and rented part of their home in order to more easily afford the house payment or to just pay the house off early. Some have leveraged their way in to purchasing several houses with the positive rental income, eventually taking the place of their regular jobs. Call me and I can tell you more details of how these smart, saavy people did it. In the Memphis MSA area where my office is, so many times a former renter can BUY a home with a payment as much as a third less than the he would pay in rent for a comparable property. If you or someone you know is renting but really wants to own their own piece of America, call me PERSONALLY at 901 482-0354 901 482-0354 or connect with me at www.JoGarner.com . If you have a comment or question you can also connect with me on Twitter at hashtag #JoGarner. There are so many opportunities for renters on the journey to be homeowners. I can help, but you have to initiate the call first with me personally. We can compare down payments, and monthly payments, special loan programs and more golden opportunities you may not have ever heard about. Remember MAKE YOUR PLAN, WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.
Phillip makes more comments
(Jo) Our general topic today is REAL ESTATE –-HOW DO I SELL IT, RENT IT –FINANCE IT? As far as answering the question “How Do I Finance It?” As one of my customers said, “Money’s cheap—borrow it.” He refinanced his home for a loan of over $300 thousand dollars and reinvested some of it into his business which showed a regular track record of giving him double digit returns on his money each year. He saw a mortgage at a dirt cheap rate and knew he would invest the funds and make money on top of money on top of money.
Another of my clients this week wanted to buy a house at WAY below market value that needed a lot of repairs. On standard loan programs appraisers usually require any structural repairs to be repaired BEFORE closing. To get around it I have a 203K renovation and repair loan program where you can borrow a lot of the repairs. But she didn’t like the extra fees involved with that. So we looked at a cash out refinance on a different property she already owned. She is able to use the cash out money to pay cash for the house she wants to buy below market and she is using the cash out refinance on the other house, she can also pay for all of the repairs with no extra fees to pay.
If you want to talk about a special HARP refinance or streamline refinance with no full appraisal required, call me personally and I can help you. If you want to look at ways to finance BUYING a home or rental property or if you want to check out how to convert the bad kind of debt to smart debt, I work in all 50 states. Make the initial call to me at 901 482-0354 901 482-0354 or connect at www.JoGArner.com
2nd segment after 9:15 break—It’s time for the Look Back Memphis Trivia Contest. Our Look Back Memphis Trivia contest brought to you by notable Memphis historian, Jimmy Ogle. Jimmy offers free historic walking tours of Memphis in the spring and fall. Contact Jimmy at www.jimmyogle.com sponsored by John and Jennifer Lawhon of Lawhon Landscape (901) 754-7474 the Lawhon’s can help you plan your landscaping even if you’re on a budget and they would like to help you if your crepe myrtles are showing signs of the mysterious fungal disease that is hitting Shelby County TN. The Lawhons are giving away a $25 gift card to the first person with the correct trivia answer. If you know the answer to one of our trivia questions, call us at 901 535 WREC 901 535-9732.
Garner # 58 07/31/15
Clayborn Temple
Question: I was the origin point for many famous Civil Rights marches in Memphis in the 1960s. Who am I?
Hint: I first opened at Second Presbyterian Church in 1891.
Hint: My architecture is Gothic Revival.
Hint: I was acquired in 1949 by the African Methodist Episcopal Church and renamed after the Chairman of the AME’s 13th District.
Final Hint: The last march of Dr. Martin Luther King, Jr. originated from this site.
Answer: Clayborn Temple. Built in 1891 as Second Presbyterian Church, the Gothic Revival church is located at the corner of Hernando Street and Pontotoc Avenue near FedExForum. The church has been inactive since the late 1980s, although the African Methodist Episcopal Church has had plans to restore it for some years. However, the church has been spending its money helping flood victims in Nashville and other natural disaster areas in recent years, according to Mitchell.
It’s where the marches started and ended for sanitation workers in the 1960s, and Martin Luther King Jr. spoke there several times. The African Methodist Episcopal Church acquired the building in 1949, renaming it Clayborn Temple after John Henry Clayborn, chairman of the AME Church’s 13th district. Historic Clayborn Temple AME Church is on the market for $1 million.
The AME church is targeting a foundation or nonprofit organization for a buyer. In addition to the $1 million purchase cost, the property would take around $4 million to renovate. The property is also adjacent to Saint Patrick’s Catholic Church, which could present zoning issues for any new construction, such as building a property which would sell alcohol. The property has many interesting features, including stained glass, a chandelier and an organ.
Last Week: Memphis Pink Palace Museum. The Memphis Pink Palace Museum and Planetarium serves as the Mid-South’s major science and historical museum and features exhibits ranging from archeology to chemistry. Over 240,000 people visit the museum each year. The Sharpe Planetarium, housed at the Pink Palace, features 165-seat theater-in-the-round auditorium and offers public shows that project star fields, visual images, and laser lights on a domed ceiling. The Crew Training International IMAX Theater opened on January 21, 1995 and features a four-story high movable screen. The Pink Palace Museum, the Sharpe Planetarium, and the Crew Training International IMAX Theater are accredited members of the American Alliance of Museums.
The headquarters for the Pink Palace Family of Museums is covered in pink Georgian marble; the mansion was given to the city of Memphis in the late 1920s by Clarence Saunders, the founder of Piggly Wiggly, because of his financial troubles. He had the residence built in 1923, but lost a fortune and the home due to financial reversals on Wall Street. In March 1930, after the Stock Market Crash, Memphis Museum of Natural History and Industrial Arts opened in the mansion. The original exhibits featured stuffed animals and birds, dolls, anthropological items from local wealthy collectors, as well as items related to Memphis’ history, particularly Confederate military uniforms and memorabilia.
Jimmy Ogle gives free walking tours in Downtown Memphis during the Spring and Autumn, with the Autumn, 2015 tours with the next Riverfront Parks Tour being Sunday, September 27 (Mud Island Walk Bridge & River Walk), the next TUESDAY TOUR being September 15 (The Great Union Avenue Manhole Cover & History Tour) and the next Bridge Walk being September 20. Go to jimmyogle.com for the 2015 Autumn season schedule and locations. The
Shelby County Courthouse Tour: Third Thursday each month at 12:00 noon – next is Thursday, August 20.
QUESTIONS ANSWERED BY PHILLIP KEMP:
Why should I Hire Reed & Associates to Manage My Rental Properties?
- Experienced
- Real Estate since 1992; Residential Property Management since 1997
- Investors: Local, National, around the world
- Portfolio size: 1 to 150
- Property Management Style
- Work with Homeowners & Investors
- Portfolio Based
- Smaller batch of properties per PM; more availability; more hands on with the owners and tenants they work with
- Education / Technology
- MAAR, National Assoc of Realtors
- NARPM
- Education/Classes; Conferences
- Web based software; online owner portal; direct deposit for owner payments
What does it cost to self-manage my rental home instead of hiring a property manager?
- Weighing options; determining costs
- Typically pay PM % of monthly rent to handle tasks on your behalf
- Costs are not JUST financial
- TIME
- Spare time or during the work day
- Showing a vacant property
- Repairs / maintenance calls
- Busted pipes, middle of the night
- Unexpected / inconvenient
- Chasing rent
- Accounting
- EMOTION
- Hard to quantify
- Emergencies
- Unpaid rent
- Dealing with neighbors & complaints from neighborhood assoc.
- RISK
- Fair housing
- Liability
- Properly handling an eviction
- FINANCIAL
- Dealing with vendors
- Lost Revenue / Unpaid rent
- Owners costing themselves $$ due to unpaid / slow rent due to tenant stories vs having S.O.P. for rent collection & professional PM with a policy to follow
- Repairs – too much or too little
- Pricing – priced too low – lower ROI; overpriced – sits vacant too long
- Time cost? What is your time worth?
Should I Rent or Sell my Memphis home?
What are your goals / future plans / motives for this home?
- May want to move back into in the future?
- Comps to determine value
- Do you have equity or can you sell & break even?
- If underwater, can you bring cash to closing, or do you want to consider a short sale?
- Don’t want to be in the Rental / Landlord Business?? Look to sell
- If none of these options are what you want or your goal is to keep the property, renting it out may be a good option for you
- Long term vs short term
- Will determine what type of repairs / upgrades / systems you may want to consider
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QUESTIONS ANSWERED BY JO GARNER:
What mortgage terms can you give to a real estate investor for purchasing a rental home?
For people buying property to rent out for investment, on a single-family home, if the investor owns less than 4 financed properties, they can purchase with 20% down payment or they can refinance up to 75% loan-to-value. If they cash out mortgage companies usually stipulate a max loan-to-value of no more than 65% in some cases.
The lending rules are different for real estate investors owning over 4 financed properties. If they own between 5 and 10 financed properties, they are also required to show a lot more money left in reserve for emergencies than if they owned 4 financed properties or less.
Borrowers who own more between 5 and 10 financed properties If the borrower is trying to buy or refinance their primary residence there is no limit on the number of other financed properties.
- Can a real estate investor refinance his rental property using the special HARP refinance and the FHA streamline without an appraisal value and getting into the deal with very little money down? The answer is yes, the HARP and FHA Streamline refinances are good for primary residences, 2nd homes or rental properties.
- Where can investors find the funds to use for down payment?
- What is the current limit on number of financed properties for investors using traditional financing?
*how to strategize getting double that number
* no limit if you are buying or refinancing your primary residence
- Do you offer Renovation and repair loans for investors and owner occupants?
- How do you help your clients get in today for little or nothing down?
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REAL ESTATE TIP OF THE WEEK: Phillip Kemp shares how important it is to treat your rental real estate property purchases like a business. Like buying stock, take the emotion out of it. Get a manager who knows the ins and outs of property management to keep your investment profitable.
Announcements: 1. Talk Shoppe offers free education and networking to anyone interested in real estate or in business. This Wednesday August 5th, 2015 9A-10AM at the University of Phoenix 65 Germantown Court Cordova, TN (across from The Butcher Shop), Join us for “Securing Social Security: Today, Tomorrow and For the Future.” John Keller, Financial Advisor with Edward Jones and Ken Parrish with Franklin Templeton will be presenting to very helpful information. For more information about Talk Shoppe, go to www.TalkShoppe.com
- To hear the podcast from today’s show or other podcasts, go to www.JoGarner.com
- “MAKE YOUR PLAN, WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.”
Transitional Music: Knock Three Times by Tony Orlando; Moving on Up the Jeffersons;
Day Tripper The Beatles (taking the easy way out) Memphis by Johnny Rivers for the Look Back Memphis Trivia Contest.
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Quote Corner:
“Hanging onto resentment is letting someone you despise live rent-free in your head” Ann Landers
“Service to others is the rent you pay for your room here on earth.” Shirley Chisholm quotes. American Politician, the first African-American woman to win a seat in the United States Congress
You never know how many friends you have until you rent a house on the beach”
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ABOUT PHILLIP KEMP, REAL ESTATE BROKER AND PROPERTY MANAGER, REED & ASSOCIATES OF TN, LLC
Phillip Kemp
Real Estate / Property Management
Broker/Co-Owner
Reed & Associates of TN, LLC
269 Germantown Bend Cv, Suite 101
Cordova, TN 38018
(901) 758-1133 main office
(901) 209-0555 direct / (901) 461-4662 cell / phillip@myreedhome.com
Licensed Broker in TN & AR / Licensed Agent in MS
Personal:
Raised in Baton Rouge, LA; lived & worked in Memphis since 2003
Graduated B.S. in Business Administration from Mississippi College 2002
Married to Sharon; 3 Children: Stephen (7), Clara (5), Alice (1)
Hobbies: reading, fishing, golf, LSU Football, cooking BBQ & Cajun food
Activities: Church (Bellevue Baptist) & Kids sports
Professional:
12+ years’ experience in Full Time Property Management
Licensed agent since 2003, Broker since 2009
Professional Associations: NAR(Nat’l Assoc of Realtors), MAAR(Memphis Area Assoc of Realtors), NARPM(Nat’l Assoc of Residential Property Managers), BNI
Reed & Assoc:
Currently managing approx. 500 single family homes in Shelby, Fayette & Desoto (MS) counties
Locally owned & operated
20+ years in Business
ABOUT JO GARNER, MORTGAGE PROFESSIONAL WITH EVOLVE BANK & TRUST
www.JoGarner.com (901) 482 0354 jo@192.232.195.219 twitter @jogarner
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 25 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 She was also the editor of Power Shoppe, a free weekly e-zine designed for real estate professionals and others indirectly connected to the real estate industry and currently publishes on her blog www.JoGarner.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.
PHOTO GALLERY 8-1-15