Your Real Estate & Your Financing — Rent vs. Buy or Should You Sell It?
In this episode you will get some information on 1. Some rules of thumb for making the decision to rent vs buy. 2. We will be covering some scenarios of when you may want to sell your home when it may be better to use it for an income-producing rental property. 3. Phillip Kemp with Reed & Associates of TN will be informing us on what a good property management company can do for their property owners. Thank you for connecting with me on Real Estate Mortgage Shoppe.
If you do not get the answers you are looking for in this blog post/podcast, please contact me personally at 901 482-0354 jo@192.232.195.219 and let’s get the answer to your questions. Thanks again for connecting!
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Good morning Memphis! Top of the morning to our friends across the 50 states! You’re on Real Estate Mortgage Shoppe and I’m your host, Jo Garner, Mortgage Loan Officer. I would like to talk with you while we are live February 6th, 2016 . Just call the studio at 901 535-9732 or outside the Memphis area 800 474-9732. You can also connect with me at www.JoGarner.com.
Our topic today? Your Real Estate & Your Financing– Rent vs. Buy or Should You Sell It? During are next few minutes together we will be covering 1. some rules of thumb for making the decision to rent vs buy. 2. We will be covering some scenarios of when you may want to sell your home when it may be better to use it for an income-producing rental property. 3. Phillip Kemp with Reed & Associates of TN will be informing us on what a good property management company can do for their property owners.
Phillip Kemp, it’s great having you back in the studio again. Phillip is a licensed real estate broker with over 12 years experience in property management. Phillip, tell us a little more about yourself and what Reed & Associates does for your clients? (Jo) Before we make a decision on whether to Rent vs. Buy or Should We Sell, let’s try to decide which way this mortgage market is going to move next week. The unemployment rate moved lower than expected and wage growth improved much more than expected. The improved wage growth report yesterday sort of evened out the higher than expected unemployment report causing mortgage rates to barely budge, staying at 8- month lows. The fixed rate 30 year conventional is coming in around 3.625% to 4% no points. You may even get the rate lower. A lot of factors play into the rate quotes. The 15 year fixed ended the day in the low 3’s. Time for a lot of you to look at refinancing scenarios again. Let’s Make Your Plan. Work Your Plan. If The Deal Works For You Today, Do It Today! I want to talk with you personally about this, but you have to call and talk with me personally to work with me. You can call me now on the air at 901 535 9732 or after the show at 901 482-0354 or connect with me at www.JoGarner.com
Phillip, my team and I have been getting a lot of calls from people who want to look at refinancing their primary residences and even their rental properties. I am working scenarios on lowering the interest rate, shortening the terms on mortgages so my clients can get rid of their mortgages sooner. The number of people trying to purchase homes has picked up too. What kind of trends are YOU seeing in your office?
(Jo) More calls are coming in from first-time homebuyers too. More than once it is the parents calling me to help their son or daughter get financed to buy their first home. In Memphis and the surrounding areas and in quite a number of other cities where homes are reasonably priced and not in high-costs areas, the monthly note including taxes and insurance can be as much as a third less than the going rent on the same house. The greatest advantage to homebuyers right now is that the mortgage rate is fixed, keeping the principle and interest rate the same for as long as 30 years in some cases. At the same time, rent has been going up incrementally in some areas as much as 10% a year. If you are trying to decide whether to buy a home or rent one and you plan on staying in the geographical area for 3 years or more, I would seriously look at buying a house. At least you know your principal and interest payment will never go up whereas your landlord might be going to increase your rent every year. I would personally rather pay less per month AND be building equity in something for ME rather than pay more in rent as a tenant for the same house and have built nothing for myself. You don’t have to go the journey alone either. Pick an experienced realtor and lender with a good reputation to lead you wisely. I would LOVE to talk with you personally.
(Jo) If you are listening to us talk about making a decision to buy vs rent a home, some of you may be thinking of all the reasons that could prevent you from buying. Let’s talk about those. My assistant, Susan and I love to solve problems. I had a self employed lady call me this week and said she had talked with a lender on a 1-800 number who told her she didn’t make enough money to buy a house—ANY house. As it turns out there was plenty of income hidden in the BACK pages of her tax returns. With a few minor adjustments this lady can qualify for the house she wanted. Other people say, “I don’t have enough money down.” I am a great treasure hunter. And I have a map to find money you may not even know about. And we can talk about those student loans too.
Which way do you want to go? Let’s make it easy. Phillip, what do you tell your clients who are trying to decide whether to sell their house or rent it? What are some of the ways you take the burden off the homeowner on the management side?___________________________________________________________________
2nd segment after 9:15 break: It’s time for the Look Back Memphis Trivia Contest. The Look Back Memphis Trivia Contest is brought to you by Memphis notable historian, Jimmy Ogle www.jimmyogle.com,. Jimmy Ogle offers free historic walking tours in downtown Memphis. To get his spring and fall schedule, go to www.jimmyogle.com . our 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. Garner # 69 02/05/16
Cordova, Tennessee
Question: “Farms, Flowers and Fellowship” are the theme on the sign leading into my town. Who am I?
Hint: I was once known as Allentown (because there were so many land owners named Allen).
Hint: I was once known as Marysville as one of my early residents (Mary Williams) was so kind and neighborly that the community was named after her!
Hint: My original railroad was the Tennessee Midland Railway, which even gave me the name Dexter, until I finally received my current named on March 13, 1900.
Final Hint: My lasting (and current) name is associated with the California Gold Rush!
Answer: Cordova, Tennessee. After graduating from Princeton, Roscoe Field left the area in the late 1840s for the California Gold Rush to pan for gold in the Sutter’s Mill area known as Rancho Cordova. When Roscoe returned to this area in 1852, he married Emily Ecklin and gave her a wedding ring made from gold he acquired from that Gold Rush experience. When Roscoe was 78 years old, the railroad was looking for a name to replace Dexter, and Roscoe suggested Cordova! Through the middle 20th century, there were numerous dairy farms and at one time over 92% of the fresh flowers being sold in Memphis came from the Cordova area! “Forgotten Days Of Farms, Flowers And Fellowship in Cordova, Tennessee” is a new book by Darlene Sawyer and Jim Waddell covering the experiences and memories of many former residents and is available at Trustmark Bank, 1283 North Houston Levee Road.
Cordova is a community in southeast Shelby County. Cordova lies east of Memphis, north of Germantown, south of Bartlett, and northwest of Collierville at an elevation of 361 feet (110 meters). The majority of Cordova has been annexed by the City of Memphis. The remainder of Cordova is in unincorporated Shelby County, in the Memphis Annexation Reserve area. The boundaries of the Cordova community are inexact, but are generally regarded as the Wolf River on the south, Whitten Road on the west, Interstate 40 on the north, and Pisgah Road on the east. Parts of Shelby Farms are considered part of Cordova. The Old Cordova Area is centered on Macon and Sanga Roads, 3 miles east of Germantown Road. It consists of the former Town of Cordova, with some of the original structures still present.
Jimmy Ogle gives free outdoor walking tours on the sidewalks and parks in Downtown Memphis during the Spring and Autumn of each year, with the next tour being a brand new Fairgrounds Walking Tour at 2pm on Sunday, February 21 (assemble at the Coliseum). The D’Army Bailey County Courthouse Tour (indoors): Third Thursday each month at 12:00 noon – the next being Thursday, February 18.
Go to jimmyogle.com for the 2016 Spring Season schedule and locations.
QUESTIONS ANSWERED BY PHILLIP KEMP:
1. ACQUISITION: A. turn key acquisition of ready-to-rent properties B assisting investors to aquire & renovate properties
2. Property Management Services A. Leasing/Marketing B. Accounting/Financial C. Day-to-day lease management
3. Repairs & Renovations A. Preventative Maintenance B. tenant turn/make ready C. Renovations & Upgrades (for long term investment performance or in preparation for sale
4. Exit Strategy/Asset Disposition A. Full-service MLS Listings for retail and investor buyers B. Network of investors to purchase AS-IS.
5. What are some rules of thumb to determine whether to turn a property into a rental or to sell it?
6. What are 2 of the most important factors an aspiring real estate investor should consider to structure a good cash-flowing property?
7. What sets Reed and Associates apart from the competition?
8. Phillip talked about Do It Yourself Fix Up Projects you should not do yourself and referenced the article http://www.realtor.com/advice/home-improvement/diy-projects-to-avoid/
QUESTIONS ANSWERED BY JO GARNER:
Questions for Jo Garner to answer:
1. What if your borrower owns his primary residence and wants to buy and move to his new home but can’t sell his current home? What financing solutions to offer someone like him?
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.
In many cases the homeowner gets a home equity line of credit in addition to the amount owed on existing first mortgage on the home where they currently live.
If they can’t sell the existing home before they have to close on the new home, they draw out the funds from the newly acquired equity line secured on the old home to put down on the new home so the payment on the new home is low, just like it would have been anyway if they could have sold the old home first. When the old home finally sells later on, the new equity line on the old home is going to be paid off along with the old first mortgage on that home. Then the home owner is left with only the small amount owed on the new home first mortgage with the itsy bitsy payment per month.
A few years ago we were simply doing a first mortgage and a piggy-back 2nd lien equity line on the new home being purchased, but as of today the pricing has gotten a little outrageous on that particular structure, so we can achieve our same goal easily enough by putting the temporary bridge equity line on the old home instead and paying it off when the old home sells.
2. What do you tell your prospects who are trying to decide whether to rent a home or buy one? Is it cheaper to rent or buy a home in Memphis or a city like Memphis with reasonably priced real estate? The answer can be yes or no depending on what you are trying to accomplish. Are you thinking short-term or long-term? Are you thinking about saving money or making money?
If you don’t plan on staying in the geographic area for more than three years and you are just looking for a short-term savings, then Memphis can be the place for you to get a good deal as a renter. As long as taxes, insurance and borrowing costs are low, you should continue to enjoy lower rents. As a bonus, Memphis is just a great place to live. This can be said for other metropolitan statistical areas that are not in high-cost real estate markets too.
However, if you are looking to build your personal wealth and set yourself up to save even more money in the long-term, the statistics suggest Memphis to be a great place to make that happen. Homes in the Mid-South are not considered in a high cost area like a few other areas of the country. For investors, buying in stable areas with the more reasonably priced homes allow them to buy with a positive cash flow, rent to a large pool of tenants and enjoy a relatively stable market. These same advantages make it nice for buying a primary residence too.
If you are that person who is trying to decide whether to rent or buy a home, how long do you plan on remaining in the same geographical area? If you plan to be around for 3 years are more, let me encourage you to consider buying a home vs renting one. Remember, you’re going to make a mortgage payment either way—yours or your landlord’s. By buying a home, you are planning ahead for building equity in something for yourself . In many parts of Memphis and surrounding areas and even in other reasonable priced cities, your mortgage payment owning a house can be as much as a third less than the amount of rent you would pay for the same house. Down payment assistance is available in many cases—because remember you want to keep money saved in case of a rainy day. If you want to start buying real estate rental homes to build up your retirement portfolio, I would love to help you MAKE A PLAN, WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY. Call me on the air right now 901 535 9732 or 800 474- 9732 or call me directly off the air at 901 482-0354 or connect with me at www.JoGarner.com
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REAL ESTATE TIP OF THE WEEK: (Phillip Kemp to share a money-saving or time-saving real estate related tip –)
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 the University of Phoenix 65 Germantown Center 1st floor Cordova, TN. This Wednesday February 10th, 2016 9A-10A CT Talk Shoppe presents “How To Navigate Water Emergencies in Your Home” with Lynn McDonald of Erin McDonald Insurance Agency, Johnny Norris of All Clear Drain and Plumbing and Steve Kennedy of AAA Service Company. Talk Shoppe events are free for the next couple of months thanks to our supporters like Chef Eric Meyers of Eat at Eric’s Grill & Catering because life is too short for ordinary food. www.theconfectionerymemphis.com For more about Talk Shoppe go to www.TalkShoppe.com
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Special thanks to Sauce Marketing at www.saucememphis.com for marketing podcasts from Real Estate Mortgage Shoppe.
If you are a business person looking to make some great contacts with other business people, come out to the Great Hall in Germantown, TN 1900 S Germantown Rd this Monday night February 8th from 5p to 8p for some great food and lots of networking at the Business Network International Networking Extravaganza. You can probably find me at the Talk Shoppe sponsor table. https://www.facebook.com/events/1552414611750805/ for more info about Business Network International www.bnimidsouth.com
FOR THIS PODCAST OF REAL ESTATE MORTGAGE SHOPPE AND MORE, GO TO JOGARNER.COM
Call me and let’s MAKE YOUR PLAN, WORK YOUR PLAN. IF THE DEAL WORKS FOR YOU TODAY, DO IT TODAY.
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QUOTE CORNER: We have the top 5 funniest excerpts of letters from tenants to their landlords. To protect the innocent, none of these come from tenants of Reed and Associates. (Phillip Kemp reads the quotes and Jo Garner comments
But these letters do give you cause to wonder –what exactly were these tenants saying-
Starting with #5: “The toilet is blocked and we cannot bathe the children until it is cleared.” Hmmmm…(Where were they bathing their children??)
#4. “I request your permission to remove my drawers in the kitchen.” …(Hmmm….might be more appropriate in a different part of the house, but guess you can remove your drawers anywhere you want to as long as it doesn’t break any laws…)
#3. “Our lavatory seat is broken in half and is now in three pieces.” (Ok…may require a mathmatics lesson)
The next 2 really cause one to ponder cause and effect…
#2. “Will you please send someone to mend our cracked sidewalk. Yesterday my wife tripped on it and is now pregnant.” (OOH…stay away from that sidewalk)
#1. “Our kitchen floor is very damp, we have two children and would like a third, so will you please send someone to do something about it.” .(Let’s see..what exactly do you want me to send someone to do for you?) (some tenants have no limits on what they ask their landlords to do for them.)
Transitional Music: “Go Your Own Way” by Fleetwood Mac; “Take It Easy” by the Eagles (that one is for you, Glen, gone but not forgotten); “On My Way” Phil Collins; “Memphis” by Johnny Rivers for Look Back Memphis Trivia Contest
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REJOINERS:
Nick Barnes, Memphis, TN. videographer testvideostudios@gmail.com
Nancy Beaudoin, Auburn, Maine
Troy and Lynn McDonald, Erin McDonald Insurance Agency (901)849-7101
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 LOAN OFFICER:
www.JoGarner.com (901) 482 0354 jo@192.232.195.219 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 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
PHOTO GALLERY FROM 2-6-16 SHOW