Good morning to you, Memphis! Good morning across the country on IHEART radio. You’re on the Real Estate Mortgage Shoppe program. I’m your host, Jo Garner, mortgage officer with Evolve Bank and Trust. Joining us around the coffee table today we have Aaron Ivey and Bill Ivey, Brokers and Owners of Enterprise Property Management Company.
Aaron, you guys are doing a great job at Enterprise Property Management. Tell us a little bit about yourself and what Enterprise Property Management can do for property owners.
Also around the table with us this morning we have Bill Ivey, owner of Enterprise Property Management. Bill, tell us a little bit about your background and involvement with Enterprise Property Management.
Our topic today is “Rent vs Buy: Solutions for the home buyer, homeowner and renter” But we’re here to talk with you about WHATEVER you want to discuss. If you have a real estate challenge, a financing challenge or a property management challenge, give us a call on the air at 901 535 WREC. That number again is 901 535 WREC.
(Jo talks about current mortgage and funding trends) Most everyone is aware of the tragedy that happened this week in Boston, Massachusetts. Our thoughts and prayers go out to the people in the Boston area. Even though we are several miles away from you, you are still our neighbors.
• The market was calm yesterday after rates dipped some more during the week. Negative economic news usually keeps mortgage rates low, but the Federal Reserve’s aggressive purchase of mortgage-backed securities seems to be the MAIN reason we are seeing artificially low mortgage rates right now. 30YR FIXED – 3.5%
• FHA/VA – 3.25% (varies more between lenders than conventional 30yr Fixed)
• 15 YEAR FIXED – 2.75-2.875%
• 5 YEAR ARMS – 2.625-3.25% depending on the lender
• 5 YEAR ARMS – 2.625-3.25% depending on the lender
Word to the Wise: “Get it while the getting’s good” I was sitting in a closing with a couple who have been listening to this show for almost a year and whenever we talked about these rates they said they would think, “Our rate is not bad. That refinance thing would be great for other people.” Finally they called and just asked me to work the numbers for them just to see if it would help them. . They were saved over $900/mo. Wow. They had no idea until they called that these lower rates could even help them. What are they going to do with the extra money? They told me they were going to enjoy retirement a lot sooner. If you want to talk about what a lower rate or shorter mortgage term could do for YOU, give me and my assistant, Susan Belew a call. You can reach us directly at 901 482 0354. That number again is 901 482 0354.
Bidding wars this week. Multiple families making bids to purchase the same house. Looks like this should push prices of homes up, but even though prices have gone up a little , they are still VERY affordable—especially with the historic low mortgage rates. If you’re thinking about buying a house or a few of them, now might be a great time to jump on board before the ship starts pulling away from the harbor. In fact, Stan Humphries from Zillow.com said The extra low mortgage rates are contributing to houses being more affordable but what will happen when rates go up again? Humphries predicts house prices will rise about 3.2% over the next 12 months versus the 5.8% rise we seen over the LAST 12 months. If you’re planning to keep the house for 4 or 5 years are more, you may find it is cheaper to buy than rent with current market conditions. However, if you’re not ready to settle down and don’t like doing maintenance work on the house, renting can still be a great choice for you or even a Rent-With –Option-To-Buy agreement. Memphis is a gold mine for renters or home buyers.
Refinances are still popular, especially the Home Affordable Refinance Program that we call HARP. If you have a mortgage that was endorsed by Fannie Mae or Freddie Mac prior to June 1st, 2009, you should be able to refinance with no appraisal value needed. The closing costs are lower and you can roll them into the loan if you choose.
The USDA Rural Housing streamline refinance has a new pilot program out that is very easy to do. The FHA streamline is still hot. By refinancing from one FHA loan to another, you don’t need an appraisal at all. My assistant, Susan Belew and I can help you get into these refinances with very little or no costs out of pocket. If you want a free estimate on refinance terms give us a call directly at 901 482 -0354. Our direct number is 901 482 0354. Or you can catch us on our blog www.mortgageloansblog.com OR call us on the air today at (901) 535 WREC The on-air number again is 901 535 9732.
Today we are talking about “Rent vs Buy: Solutions for Homebuyers, Home Sellers and Renters.” Sitting right here around our coffee table we have Aaron Ivey and Bill Ivey, experienced realtors and property managers with Enterprise Property Management.
When is it better to RENT? When is it better to BUY a house?
Questions for Bill and Aaron to answer:
1. “Aaron and Bill, I’ve been watching you guys for about 10 years and I’ve seen what you can do for investors from around the country and locally who want to invest in real estate but don’t have the time or resources to manage their real estate investments. I understand that you can help people who need to lease their properties after moving into a newer home too.”
• Bill’s response- “IT ALL STARTS WITH A PHONE CALL OR EMAIL…” Talk about how easy it is to call in and discuss the homeowner’s specific situation, property management services in general and then the specifics about their home as it fits into the marketplace as a whole. Then move into struggles homeowners have in moving from homeowner to rental property owner… How do you overcome the homeowners fear that someone will come in and trash their house and not pay the rent?
Struggles new homeowners have:
• Homeowners often have trouble transitioning management to the property manager-
• Often have trouble considering house as an asset and not their home – emotional tie
2. You guys have been in the property management business for over a decade and you know the old saying about real estate –“Truth is Stranger than Fiction” Can you share some true real estate stories that stand out in your memory?
Share a story here that our audience will enjoy hearing that will allow them to connect with you and see you has someone who offers solutions
3. Tell me what someone might expect as part of the property management experience with Enterprise Property Management?
• Appreciate comprehensive services so that they can “hand off” the home to a management company and move on to their next location, which is especially appreciated when taking up new employment or relocating.
• We understand that when a homeowner is transitioning their home to a rental property, they are more emotionally tied to the property-
• Building Strong Relationships is a core value of our company – EPM is not merely a property management service
• Transparency – ask any question anytime and get pictures of their property at any time
• EPM corporate culture is a family orientated business model meaning all members of our team take a very personal interest in the success of each property and the property management experience of each of our home owners.
• Full range of inspections, quarterly, at renewal, at move out and on demand, should the homeowner be concerned about a particular matter
• Electronic Access to account information 24/7 via epmleasing.com and our management software, Property Boss. Access to statements and management activity.
• At any time we are happy to provide our homeowners a current market evaluation of their home.
• Management of your home as a stop-gap while waiting for the right opportunity to sell. (I assume this could be more than market conditions. Surely sometimes people are strapped for cash and would need to wait to sell to afford it? Does that even make sense?)
• Keep you aware of risks in owning property, changes to law, and changes financial write offs and the implications.
• Homeowners are encouraged by the positive past experience by past tenants and homeowners (verifiable by online testimonies and available customer experience, should they want to contact a current homeowner to ask questions)
• Homeowners appreciate very thorough tenant screening,
• Strong initial credit check, employment and rental history,
• Accurate and honest rent appraisals set to provide maximum cash-flow for the owner, not simply priced to appease. (Higher rent is obviously better for EPM, but the happy balance of rent and days on market is a careful consideration to provide greatest cash-flow. )
• Ongoing checks while property managers are active in the neighborhood, and
• Regular maintenance inspections provide “eyes on your property”.
Probably our biggest service to prospective homeowners is Bill’s personal assessment of property: An honest, accurate, and provided to give you the jumpstart on rental success, regardless of placement with EPM for management
Many callers have already been to our website at propertymanagementmemphis.com
Their property is an important asset and there is often significant emotional attachment.
I openly and honestly discuss their situation and explain how our company can help mitigate risk of ownership, and provide an honest assessment of what they could and should expect when working with a property manager – not just with Enterprise Property Management. There is a lot of uncertainty and I try to help people through the process by uncovering questions, in my experience, property owners don’t know to ask. It makes for a great discussion and allows me to provide the most insightful and helpful information to a property owner. Nobody likes surprises, and we conduct our business in a way that is as transparent as possible – I accessible by phone and email, and I am willing to answer any question with professionalism.
Not all Property Managers are Realtors. Both Aaron and I are Realtors, as is Bonita Elam our Leasing Manager, which actually means we are obliged to follow the National Association of Realtor’s Code of Ethics and we are required to complete ongoing education.
Questions to be answered by Jo Garner:
1. We all work with people every day who are either homeowners or aspiring homeowners. In your opinion who would benefit most from being a renter and who would benefit most from BUYING a house?
First and foremost our job as loan officers is to Take Care of the Customer. Here are 4 basic questions we ask a customer who is trying to decide what is best for them—to rent or to buy.
A. How long do you plan on staying in the house? (If the answer is 4 years or more, then BUYING might be the most profitable choice for you.
B. How much savings do you have? If you have no savings, we can look at down payment assistance programs, 100% Rural Housing loans or the VA loan (if you’re a veteran)to get you approved with very little or nothing down, but you need to set up a budget and start a savings program. This is part of the training the prospective homebuyer gets from the HUD approved Homebuyer Education program required for down payment recipients.
C. How much debt do you carry is the third question. If you have no money saved and a HIGH income-to-debt ratio—over 45%, then you may be a better candidate for renting until you can pay down some debt and save up a “rainy day fund.” Owning a home is emotionally and financially rewarding but not if you can’t afford the house and not if you lose the house to foreclosure. You want to ENJOY the home and be able to comfortably make the payments.
D. The fourth question is “what does your credit look like?” There are only a few loan programs that I have that will go down to 620 for a credit score. Most loan programs today require at least a 640 or higher. If your scores are down in the 400s or 500’s you may be temporarily labeled a BTR. Do you know what BTR stands for? …..”Born To Rent”…. At least until you can improve your credit. And we have an APP for that. –the Credit Simulator. But you need to be committed to do what is necessary to get the scores up before we start working together.
E. There are advantages and disadvantages to both buying or renting. The good news is that Memphis is a great place to do both.
2. What financing solutions do you have for a homeowner who wants to buy his new dream home but cannot sell his old home?
There have been SO many cases like that over the last few years. Most of the time the homeowner wants to use the equity from the old home to put down on the new home but if the old one doesn’t sell right way, then where do they get the large down payment they want to keep payments low on the NEW home? You can use a combination loan scenario.
Sometimes it works to do the combination loan on the NEW house. For instance if you can’t yet sell your OLD house but you need to go ahead and close on the NEW house for $225,000, then you could get an 80% first mortgage of $180,000 on the NEW house because keeping the first mortgage at 80% of the price or below on conventional financing eliminates you paying unnecessary private mortgage insurance. Then get the 2nd mortgage or Home Equity line for about $22,500 on your new house to go behind the new first mortgage. Now you only have to pay 10% down on the new house and when the OLD house sells you can pay off the new 2nd mortgage AND maybe even add a patio deck with one of those fancy bar-b-que grills.
Another way is to let us put an equity line of credit on the old home BEFORE you put it up for sale. Let’s say your house is valued at $200,000 and you owe about $150,000. The bank may be able to loan you approximately $20,000, giving you this extra money to use for a down payment on the new house you buy. When you finally sell the old house you can pay off the 1st mortgage of $150K and the new 2nd of $20,000 and never have to change anything of the financing on the new house.
Real Estate Tip of the Week: Jo shares that ideally you want your full house payment not to exceed 28% of your gross income. Your total debt-to-income ratio is the minimum required monthly payment on credit cards, car payments, student loans and other loans PLUS the full payment on the house divided by your gross monthly income. You really want to keep the income-to-debt ratio under 45% of your gross monthly income. If you do not want to be handcuffed to the house note, try and keep your total debt-to-income ratio under 40%–even though the automated underwriting programs would probably approve you for much higher.
Aaron also said that in the property management business, they look strongly at the income –to-debt ratios to determine if a certain house is the right one for a tenant.
Jo has two announcements to make:
1. Talk Shoppe offers free education and networking to anyone interested in real estate or business. This Wednesday at the Better Business Bureau we are practicing the Mastermind Principal based on the book Think and Grow Rich by Napoleon Hill. Come prepared to share ideas and resources with other business people in a small group. For more information about Talk Shoppe go to www.TalkShoppe.BIZ
2. Next week on the Real Estate Mortgage Shoppe program here on AM 600 Attorney Ron Cohen, co-owner of Premium Title Group will be discussing condos, planned unit developments and Cooperatives. To catch our podcasts for this program and others go to www.MortgageLoansBlog.com
Transitional Songs: “In America” by the Nitty Gritty Dirt Band, “King of the Road” by Roger Miller; “Home” by Phillips Phillips
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 in Memphis, TN. 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. She hosts the Real Estate Mortgage Shoppe program on News Radio AM 600 WREC in Memphis and on IHEART radio 9A to 10A CST every Saturday.
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.