Have You Considered Investing In Real Estate?

industry-without-investing

Have you ever considered buying a property as an investment? The property market is not reserved for experts and millionaires – you too could use it to make the most of your hard-earned savings.

A lot of people only buy a house as a family home and find paying off their mortgage before they reach retirement a big financial burden. Sound like you? However, buying a house as an investment (not living in it and instead renting it out) can make you a lot of money. In fact, it’s been shown that property outperforms other investments such as stocks, shares and savings accounts to bring you a nice fat profit in the long-term.

Yet somehow we’re all too cautious about hopping on the property investment train. Why? There are a few common apprehensions, questions and ‘buts’ people have when first looking at property, but there are good answers to all of them. So, before the words ‘finance’, ‘invest’ and ‘mortgage’ turn you off, have a read of the below to get clued in on what property investment can do for you and your piggy bank

But I don’t have the money to invest in property!

It’s a common misconception that you need to have all the cash up front. US banks may lend up to 75% of the property purchase price for investors, so for a $250,000 purchase (the average housing price in Lewisville according to Zillow) the total capital you need is $62,500. IRA’s and 401K’s are ways to get the down payment.

But I don’t want to take out another mortgage!

Before you panic about taking out a second mortgage, remember that the tenants who will be renting at your property will be paying off the mortgage for you, and that taking out a mortgage to pay for your investment means making more money.

But isn’t it risky?

As with all investments, there are low-risk and high-risk options.

But how can I make money from my investment if all my pennies are tied up in the property?

1) The increase in the property’s value over time. A well-chosen property and market will see the value of your investment jump up significantly over the course of five-to-ten years. You can then choose to resell at that higher price, keep it for longer to increase profits further or pass on the investment to your children.

2) The rent your tenants will pay you. This can cover the mortgage and/or provide you with an additional regular income – remember, rents will also increase over time as the area you invest in becomes more popular.

But I don’t want to be a landlord!

You don’t have to be! There are property management companies that exist to take that responsibility off of your hands. They can handle everything, from decorating and tenanting to taxes and reselling, and you’ll still be able to make a healthy profit.

When you’re ready to learn more or if you’re already clued in and want some more in-depth market advice, contact Jim Trump & Associates today! (214) 609-7123 or jtrump@kw.com

14 Easy Steps To Buying Your Flower Mound Home

ar12175310781915

14 Easy Steps to Buying Your Flower Mound, TX Home

Consultation – At this first meeting we will discuss everything from the time frame of your purchase to the details of your wants, needs and desires for a new home. In addition, we will also discuss any ‘hidden costs’ that may arise (Inspections, surveys, appraisals, etc.). If you have not already secured a pre-approval, I can assist you in securing a mortgage lender. We will also discuss the importance of having a Buyer’s Representation Agreement to protect your interests as a buyer.

Home Search – I will take the information learned during our consultation and search for all of the available homes that meet your established criteria, including For Sale by Owners (FSBO), new construction, expired listings, withdrawn listings and pocket listings (homes not on the market yet).

Schedule showings – After we have determined which homes best meet your criteria, we will schedule showings at your convenience.

Investigate for any additional information – Prior to writing an offer, I will contact the listing agent to determine if there is anything else I should know about this property before sitting down with you to write an offer.

Prepare a Comparative Market Analysis (CMA) – This information gives you as the buyer the assurance that you are offering the seller a competitive price for his/her home.

Discuss price and contract terms – The price is only one facet of an offer to a seller. We will discuss the other terms such as contingencies, closing dates, title search, and closing costs associated with your new home purchase.

Prepare offerI will prepare your offer to be submitted to the listing agent with all, if any, of the necessary contingencies and disclosures in place to protect your best interest.

Negotiate the offer – While our ultimate goal is to prepare a strong offer the first time, it may become necessary to further negotiate on your behalf to get the sales price and terms/contingencies required.

Schedule home inspections – We will schedule and be present for any and all home inspections.

Review home inspection findings We will discuss with you any adverse findings uncovered during the home inspection, or what is to be a concern; and what is not.

Negotiate repair requests – It may become necessary to request further compensation from the seller on your behalf as the buyer if repairs are uncovered as the result of a home inspection.

Coordinate correspondence – An ongoing process, this keeps the transaction moving forward by communicating with the lender, title company and listing agent to make sure all the stipulations in the contract are being satisfied.

Review final documents – Once the lender has prepared the loan package, a HUD-1 Statement will be sent to the Buyer’s Agent for review. I will review this document to make sure all financials have been recorded properly and then forward it to you for your review.

Attend closing with buyer – This gives my buyers the added comfort of knowing they will have an advocate present during the closing if something unexpected should arise.

If you are looking to buy a Flower Mound home, you are 14 easy steps away. Contact The North Texas Home Hunter today at (214) 609-7123 for professional real estate services, buying, selling, or investing.

kw1546trumpf07

5 Mistakes That First Time Home Buyers Often Make.

Buying a home is exciting, especially when you’re buying for the first time. In the midst of all of the excitement, it’s easy to become blinded by beautiful back-splashes, granite and quartz counter tops, hardwood floors, and fenced-in backyards. While looking at homes that are completely perfect from top to bottom, you may begin to rationalize a larger purchase than you had originally planned for:

“This house is perfect for me; it’s worth $50,000 extra dollars for me to have a house with enough space in a perfect location,” or “We were planning on spending a little bit of money on painting; we can spend $50,000 extra on this house because it doesn’t need any work.”

Overspending

Before you even look at a single property, you need to know exactly how much you can afford. There are several online calculator tools you can use, but these tools are only estimates. How much is your current rent payment? Did you meet that payment each month with ease, or was it a bit of a struggle each month? The payment you can afford right now is a good indicator of what you’ll be able to afford in your new home.

Meet with a lender and get pre-approved for an amount you can afford. Also, keep in mind that it’s always better to lean towards a lower amount, rather than a higher amount. You do not have to use the entire amount you’re pre-approved for. Once you know how much you have to work with, then and only then should you start your house hunt.

Counting chickens before they hatch

When determining how much mortgage you can afford, base this amount on what you are earning today. That is, the income that you and your spouse earn from stable sources. If you’re in your last year of law school, for instance, don’t assume that you will be earning much more money in a year or two, so you can afford a larger payment. If your wife is expecting a big promotion, don’t base your mortgage payment off of her potential salary increase. No one can predict the future, and although you may very well be in a better financial situation a year down the road, there is no guarantee.

Failing to account for closing costs, property taxes, HOA, and homeowner’s insurance

When you rent a home, you generally only have one payment, rent, and then maybe renter’s insurance, which is optional. When you buy a place, your mortgage payment is only the beginning of an array of costs. Homeowner’s association fees can be as high as a few hundred dollars per month, depending on where you live and the amenities and services offered.

Homeowners insurance and property taxes vary based on your geographic location. Florida has notoriously high homeowner’s insurance rates, where they average $161.08 per month. In Idaho and Wisconsin, rates are a bit lower, averaging below $50 per month, according to Value Penguin. Property taxes average higher in New Jersey, New Hampshire, Texas and Wisconsin and they’re lower in Louisiana, Hawaii, and Alabama.

On top of all of those costs, if your down payment is less than 20 percent of the selling price, you may end up paying an additional cost, private mortgage insurance (PMI), which is basically insurance for the lender in case you default on your loan.

At the end of it all, your $800 mortgage payment can easily turn into a $1,200 house payment.

Failing to protect yourself with home inspections, contingency clauses, etc.

During your house hunt, you may find a house that looks great at first glance. Then, as you walk through a few of the rooms, you notice problems with the house. Maybe the floors squeak or the kitchen island is off-centered. After walking through the house, you come to realize that someone simply put lipstick on a pig, and this house is in questionable shape.

Home inspections provide you with some protection. The inspector will be able to find problems that you can’t and you want to know these problems before you sign on. “The seller isn’t likely to tell you there’s mold in the basement or the walls are poorly insulated,” reports MSN.

Contingency clauses also offer a form of protection. A mortgage financing contingency clause protects you if you lose your job and the loan falls through or the appraisal price comes in over the purchase price. Should one of these events occur, the buyer gets back the money he used to secure the property (Earnest Money). Without that clause, the buyer can lose that money and still be obligated to buy the house, legally.

Being too naive or too paranoid 

Some first-time home buyers are naive. Overly optimistic, they think nothing could possible go wrong. If a home has a few problems, they view them as easy fixes and are unrealistic when it comes to the cost and time it takes to fix up the home. Some naive buyers will move to a neighborhood on the wrong side of town, forgetting that you can fix up a house, but you can’t change your neighborhood or location without moving.

Paranoid buys are sometimes difficult to work with. They may not believe the price is an accurate assessment of the house’s market value. They’ll submit low-ball offers and then show frustration when they are consistently rejected. Paranoid buyers don’t trust real-estate agents, and may even try to buy their home without an agent, which is generally an unwise choice for anyone, let alone first time buyers.

To protect you during your purchase, and for professional real estate service, contact The North Texas Home Hunter at (214) 609-7123 or jtrump@kw.com

What Does Your Realtor Do?

In this fast paced world of the internet, and with so many websites in which to view homes for sale, the question always comes up; “Why use a REALTOR when buying or selling a home?” Many buyers and sellers only look at what they perceive as the cost of hiring an agent and overlook the real benefits the agent brings to both sides of the sale. Typically, the seller pays the commission to the listing agent for listing, marketing, and selling the property and the listing agent then shares a portion of that commission with the Buyers’ agent. 

In most cases, the commission is the only fee that is charged and keep in mind; they are only paid upon the closing of the property. 

An experienced agent is trained in the complexities of the transaction and generally is knowledgeable in the market area where the home is located. The fiduciary allegiance owed by the agent to the client is first and foremost. The agent must represent their clients best interests at all times. The negotiating skills of that agent is critical and must include strong communication skills, strategies, problem solving, being creative and maintaining a rapport with the agent on the other side of the transaction. 

Unfortunately, locating a buyer and then putting the property under contract is only half of the equation. The early period of the contract (Option Period) is when the buyers hire inspectors to inspect the property and go over its ‘overall health’.  In many cases, the buyer will ask for repairs to be made by the seller, which reopens negotiations as to what the seller is willing to do and the buyer is willing to accept. The agent is more than likely also involved in assisting the buyer in the type of that will best suit them, and referring great lenders to them. With all of the choices now available from the internet and what we have heard about the issues with the large national (big box) banks, the process of selecting a lender has become a lot more complicated. As an agent, I believe that using a smaller, local community lender is the best. It doesn’t matter how great the terms are that the buyer is offered, if the lender cannot deliver as promised, then it is probably too good to be true. Lastly, the liability in selling real estate if NOT handled correctly can be great, and the agent potentially assumes that liability along with the client. The state of Texas is a consumer state and requires the seller and agent to disclose any known defects in the property. Part of the job of the agent is to advise the seller of the great importance of disclosure and make sure that the proper forms are provided to any potential buyer. After the sale, any issues that arise are usually concerning the condition of the property. 

A real estate transaction is very complex and requires expertise. An agent, an experienced agent, will help you through the pitfalls. 

Jim Trump is one of the rare licensed REALTORS that is a Certified Negotiation Expert. For professional real estate services, contact The North Texas Home Hunter, Jim Trump, at (214) 609-7123 or jtrump@kw.com

10177988_10202212745146046_7262910266828796706_n

 

You Do Need A Professional When Buying or Selling Your Home!

imagesNI76CWGO

 

Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to go it on their own. In today’s market: you need an experienced professional!

You Need an Expert Guide if you are Traveling a Dangerous Path

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and ready for you to move in to can be tricky. An agent listens to your wants and needs, and can sift out the homes that do not fit within the parameters of your “dream home”.

A great agent will also have relationships with mortgage professionals and other experts that you will need in securing your dream home.

You Need a Skilled Negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

Any Way That You Slice It, You Are Paying For A Mortgage!

images
There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlord’s. As a paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Also, if you purchase with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period.

And, as an owner, the mortgage payment is a ‘forced savings’ which will allow you to have equity in your home you can tap into later in your life. As a renter, you guarantee the landlord is the person with that equity.

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are still at bargain prices.

Contact me for professional real estate services @ (214) 609-7123 or jtrump@kw.com

Tips For Home Buyers In A Hot Sellers Market!

The increase in housing demand has created a Sellers’ Market; this being the case, it is extremely important that buyers are prepared when they decide to buy in 2014! In order to compete in a seller’s market, buyers need to have their ducks in a row and look as strong as possible to a potential seller. Buyers—Be Ready!

The following are some great tips for being ready to move when the right property becomes available:

  1. Get Prequalified – Choose a lender so you know how much you can afford to buy. Complete a loan application so the lender has all of your pertinent information. Consider all loan options available; FHA, VA and Conventional. Discuss the pros and cons of how much of a down payment you will need with your lender so that you are educated going into the buying transaction.
  2. Review Your Credit Score – Have a mortgage lender check your credit and discuss your credit score with you. Often an increase in credit score by 10 points can make a huge difference in your interest rates. Discuss possibilities to increase your credit score with your lender. Some increases can be accomplished in 72 hours.
  3. Get Documents in Order– Locate your previous years’ W-2s and tax returns. Start saving paystubs and bank statements.
  4. Review Bank Statements for Large Deposits – Lenders will require any large deposits that aren’t income-related to be documented with a paper trail. Sold a car recently? Received a gift from a family member? Make sure that you have the necessary documentation to support any large deposits.
  5. Find a Great Real Estate Agent– Not all agents are created equally, so it is important to find an agent that you feel comfortable working with! Call me at (214) 609-7123 so that we can set up a no obligation consultation. That way, we get to know each other and make sure that we will be on the same page.

HAPPY HOUSE HUNTING!!