Commercial Real Estate Loan

How commercial loans and mortgage work

Can you buy a house with no money to put down still?

Are you desperate to join the property ladder but just don’t have any money in the bank to put down? Maybe there is another way to get on the ladder without having a huge amount of money in the bank.

A Guarantor

There are some mortgages for first time buyers that allow them to use someone they know, usually a family member to act as a guarantor on behalf of you. The method in this is that the guarantor will guarantee that the mortgage payment will definitely be made on time. This option may mean that the guarantor may end up making the payments themselves if the buyer finds themselves in financial difficulty.

The guarantor will usually have to hold collateral themselves in the form of property to be a viable option for banks. Because of the fact that the guarantor offers extra security for the lender this option may come with a lower deposit required to secure a mortgage.

While this is a good option to take, finding somebody that trusts you enough to guarantee your monthly payments may take some doing.

There is more information on being a guarantor.

FHA Mortgage

The FHA (The Federal Housing Administration) is one of the first places most new homebuyers go when they are after a mortgage with only a low down payment to offer. The FHA offer low down payments along with attractive mortgage rates.

buy house

There is of course a downside to this type of mortgage and that is the fees. There is a one-time fee of 1.75% of the amount borrowed this is an insurance mortgage premium. There are also annual insurance premiums of 1.20% to 1.25% on 30 year mortgages; however these can be paid on a monthly basis which will be easier than finding the money to put down all at once.

The interest rates on FHA mortgages are also typically lower than conventional mortgages, which means the difference between an FHA mortgage and conventional mortgage costs are fairly similar.

 

80/20 Loan

Another option that is popular is the 80/20 loan (also known as the piggybank loan). This type of loan would have you borrow 80% then 20% which then gives you 100% of the home price. The first loan is for 80% of the purchase price and the second loan is for 20% of the purchase price.

What happens in the scenario of a borrower not having any money at all for a down payment is they will take out another loan of 20% of the home’s value as an equity loan thus not needing a down payment on either the 80% loan or the 20% loan.

Opportunities for mortgages with no down payment are becoming more and more rare these days. There are still ways for sensible homebuyers to find their way into the market, but a lot of careful planning and money management needs to go into it as high interest rates can end up catching people out in the long term.

Determine the Market Value of Your House with a Real Estate Appraisal

A real estate appraisal is valuation of a property conducted by a professional or licensed real estate appraiser. There are numerous factors to consider before an appraiser can declare a final value. Property owners need an appraisal prior to putting their house for sale or obtaining a home loan from the bank.

What is a Real Estate Appraisal?

A real estate appraisal is done when people are planning to sell their house or property and would like to know what a fair asking price would be. Property valuation or real estate appraisal is a method of assigning value for a property. An appraisal is done for both the buyers and sellers because, while the buyer does not want to overpay for a property, the seller does not want to sell his property for less than its worth. Also, public buildings do not earn income; consequently it is impossible to use the income approach to value the property. Expectations about how long the property would typically take to sell in the local market will also be included.

An appraisal comes in handy when you’re trying to borrow money as the property will likely be used as collateral. Your banker will not issue you a home loan without an appraisal from an approved appraiser. One may feel more comfortable working with two or more ‘supervising’ appraisers on their journey as a real estate appraisal is one person’s opinion of your home value.

Who Makes the Real Estate Appraisal?

Property valuation is performed by an approved or qualified appraiser (also known as estate valuer or land valuer in most countries and in British English as a “valuation surveyor”). The appraiser will inspect the property or home and then give it a monetary value. The appraiser bases their real estate appraisal on the practice for evaluating the worth of the real property on ground, usually its market value, value-in-use, insurable value, investment value and liquidation value. It is vital for the appraiser to select between two cost bases to determine the cost to replace a structure, and use one constantly during the research. In most places around the world the real estate appraisal will have to be carried out by as certified or licensed professional and it will be written on a standard form.
The title of appraiser is committed by attaining classes and getting passed in a test and/or having some experience in appraisal work. Doing a proper appraisal with various methods will help you to know the right value of a property in order not to overpay for a property or sell property for less than it’s worth.

real estate appraisal

What Can Determine Value in a Real Estate Appraisal?

You may get less than the so-called market value. As every property is different from the next, each needs different market value. The cost approach value is the sum of the market value of the land, depreciated replacement cost and entrepreneurial effort. The rationale is that it’s generally challenging to uncover equivalent properties inside the local market that have recently been sold in order to use the sales comparison approach. The cost approach was historically prepared as a part of most commercial real estate appraisals. This is a general starting place for the appraised value of your home, but the appraiser will write a detailed report about the local market and any features of the property being appraised that may make it worth more or less than homes nearby that have recently been sold.

The replacement price may possibly yield a much better estimation of the existing buildings value. For instance, bad neighbors could cause your property value to decrease. These are step to be taken to know the right value of a property before decisions are made. External obsolescence occurs when circumstances outside the subject property’s boundaries negatively impact its value. The cost approach value is the sum of the market value of the land, depreciated replacement cost and entrepreneurial effort. A real estate appraiser must know definition of different values.

Why You Should Think Twice About Investing In Florida

Florida is one of the places with stable housing market. Most investors here find it easy to invest in real estate which in turn gives them big gains. Most people today are after earning a lot of money and due to that they therefore look for ways of getting that additional income. The most popular and most profitable investment is that of the real estates. Do you know why? Florida Investing Jacksonville has enabled most potential buyers to be millionaires and this is though real estate investing. Getting additional income is not something easy unless you do proper planning of your finances. Another thing to know about real estate investing is that this is a great way in which you can make money. The reasons below will enable you to think twice before buying a real estate property in Jacksonville.

 It’s tough to get a mortgage

Getting a mortgage loan is not an easy thing because there are some factors that need to be considered and scrutinized before eventually giving you the loan that you have applied for. Your credit rating matters a lot and it is the one that lenders and other financial institutions look at before eventually deciding to give you a loan. If your credit rating is poor then you are assured of not getting a mortgage loan and if it’s excellent you are assured of getting the loan that you want. In Canada it takes around 2 weeks for you to get a loan but in the U.S It may take up to six weeks. The reason why this is so in the United States is because of the 2008 crash.

They are wary of the foreign investors

Florida is one of the places where more than half of the investors are foreigners. Canadians are among the biggest real estate owners in Florida but that does not mean that the bankers are wary of its people. Americans are required to pay 20 percent of the price of the house and the foreigners pay up to 30 per cent of the house price.  Another challenge that hinder the foreigners from investing here is their credit history. When you don’t have a credit history in the United States it means that you will not be given a mortgage loan.

Find out more here: http://www.forbes.com/sites/ingowinzer/2016/06/24/should-you-invest-in-south-florida-real-estate/

10 RULES OF SUCCESSFUL REAL ESTATE INVESTING

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Real estate is a big industry. There are many ways to invest in it like;

  1. Renting your residential and commercial properties
  2. Flipping both commercial and residential properties
  3. Improving properties to increase their market values

But all successful entrepreneurs such as Donald Trump and Steve Wynn have some habits in common which made them fortunate in real estate business such as;

  1. They always make a plan
  2. They know the market
  3. They encourage referrals
  4. They understand the risks
  5. They hire in an accountant

After studying these people and their successful habits, here are some rules that we have established for you that are helpful in real estate investing at Jacksonville, Florida;

Rule # 1: Educate Yourself

Knowledge is currency in this field. Therefore, it is inevitably important for you to educate yourself otherwise you would have to follow other people’s advice blindly.

Rule # 2: Set Investment Goals

As Jacksonville, Florida is a big real estate market therefore you need to set investment goals before stepping into it. It will help you to balance out your desires and finances.

Rule # 3: Determine the Best Areas for Properties

To get the best deal in real estate investing in Jacksonville, Florida, determine the best areas for properties and then find out the best deals available on these properties.

Rule # 4: Invest For Cash Flow

Also do real estate investing at Jacksonville, Florida with positive cash flows. Remember that the higher, the better rule of thumb. Equity takes time to grow whereas cash flow supports operating expenses of your property.

Rule # 5: Identify Your Tolerance for Risk

Real estate investing has risks at both private and public markets. In private market, you can own and rent residential properties whereas in public markets, you can invest in a publicly traded real estate company.

Rule # 6: Establish an Exit Plan

You must always know what you are going to do with the property you intend to buy. You cannot sell your property for several years until its market value has increased. During this period, you have to bear its operating expenses. Therefore, always develop an exit plan.

Rule # 7: Decide Between Equity and Debt

Real estate market, whether private or public, runs on both debt and equity. Investing in debt means to lend money to someone else to let him buy interest in some property whereas investing in equity means to invest in the ownership of the property. Decide which option to pick and then invest.

Rule # 8: Assemble a Team to Help You with Real Estate Investing

Gather a team of an accountant, a mortgage broker, a real estate lawyer, a property manager, an insurance broker and a home inspector to get the expert and professional advice on every aspect.

Rule # 9: Analyze Your Finances

Always analyze your finances by examining your portfolio, evaluating your assets and knowing that flipping a property can get expensive at times. Check here.

Rule # 10: Maintain Control

It is always good to become a direct investor in real estate. It lets you be in direct control of your property.

Optimize Your Profits in Jacksonville’s Challenging Rental Property Market 

 

Living in Jacksonville is affordable because this is one of the biggest cities In the United States. Most people living here come from the middle class and live a better lifestyle. There are several cities in the US and the costs of living in these cities differ from one to the other. In Jacksonville you will have to pay high costs for you to stay comfortable and enjoy the resources here. The market here is tough especially when it comes to rental property market. It’s only the independent landlords who have class A properties that enjoy but those with class B and C properties have to hassle in order to get the best the market that fits their properties. Currently Jacksonville is said to have the highest vacancy rate in the nation of around 8.5%. Most landlords here have several challenges some of which go beyond the local economy because of the competitive rental prices offered here.

How is Jacksonville’s rental property market challenging?

The rate at which the population of Jacksonville is growing is very high and this is what has made the rental property market to have a problem. The prices of renting and buying houses here are very high despite the fact that we have several potential buyers. According to data from the Huffington Post and the Census Bureau, housing in Jacksonville has become more affordable in some parts such as Florida and its larger metropolitan area. The cost of living here is said to be around nine points below that of the entire United States. The price of a median house in Jacksonville ranges at around $111, 900 and this lower when compared to that of the real estate national average at about $50, 000.

The average cost of renting a house in Jacksonville for a month averages at around $791 and this is considered affordable. With the exclusion of the cities in Alaska, Jacksonville is known to have around 747 square miles making it to be among the largest cities. It has more than 821, 000 inhabitants and this has made it to be ranked number 12 in the most populated cities. Texas transportation Institute in 2010 ranked Jacksonville number 40 out of 60 in terms of ease of commuting. Florida investing has increased in the recent years and most people now invest in this city.

Riverside is one of the walkable neighborhoods around Jacksonville. It has brick houses which serve as an amalgam of architecture styles and they were built in the early 1990s. Despite the fact that Jacksonville is roughly ranked, It has a good economic forecast as compared to other cities around. What do you know about the employment rate in Jacksonville? The employment rate in this region has greatly improved by around 1.6 % and this made the local economy to improve. Most landlords especially those with class A and class B offerings have ensured that they remain competitive in the market by keeping up with maintenance and renovations costs. Consider investing Jacksonville, FL since here you can be able to optimize your profits.

9 Things to Know Before Buying a House in Jacksonville

 

Florida investing Jacksonville can be wonderful. When you invest money in the housing market, it can be a very risky but profitable investment simply because if you should buy a home for $100,000 in 2015, and sell in 2020, it might be worth over $200,000 and that is a fantastic profit! However, this doesn’t always happen and buying a home can be very risky even if you don’t plan to invest. So, here are a few things you maybe should know before buying a new home in Jacksonville. Read More