Tag: Orlando Short sales

Is Orlando Real Estate Still a Good Investment?

Posted on by Jenny Zamora

Of late, there have been several bits of speculation and buzz that indicate that the Orlando real estate market is booming, with reports indicating decreased foreclosures, rising real estate prices, and a rising number of real estate sales. What we must ask ourselves is how stable is this current trend, and are we in promising times or living in a bubble that could end up in an economic collapse in times to come.

What’s changed over the last few decades?

In today’s economic and financial scenario, bank finance isn’t as readily available for Orlando real estate as it was decades before. As individual investors, individuals are hard-pressed to secure bank financing for real estate investments. What then happens, is that the small investors in a hurry to make a sizeable profit invest their own funds, often investing entire life savings to purchase real estate in order to reap the benefits in due time.

However, this doesn’t turn out well in most cases, as these investors find themselves struggling with statutory regulations such as tax assessments and payments, insurance premiums, and other fees involved in purchasing real estate. As a result, they get trapped in a state of limbo, finding themselves without their life savings, and with a compulsion to sell at a loss to recover this money.

Additionally, investor groups are backing end-users into a corner by securing real estate using cash, as the end-users cannot afford to pay all associated fees and taxes since they cannot secure bank financing. Hence, investors will end up driving out these end-users or renting out properties. In the case of rent, there is no appreciation in the value of the property, as property values will improve only if there are people willing to purchase them and start living in them. With the constantly rising prices, these practices place a lot of financial strain on the already struggling end-users.

Why reports don’t tell you things the way you need to see them

Despite the recent reports about reduced foreclosures and rising prices, why is it still a bad idea to invest in Orlando real estate?  This is because the reports don’t account for foreclosures that are dismissed due to lack of prosecution, which will not be accounted for until they are filed for again. Another possibility is that banks and similar financial institutions have a role in delaying foreclosures, simply to avoid the added burden of tax assessments and insurance.

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FHA’s Back To Work Program Giving 2nd Chances

Posted on by Jenny Zamora

 

 

FHA’s Back To Work Program

As an Orlando realtor, part of my job is to help potential home buyers get approved for a mortgage. Unfortunately, aren’t always able to qualify for the best mortgage programs like an FHA [Federal Housing Administration] loan because of negative credit events like having a foreclosure or short sale on their record.

Recently there’s been some great news for ex-homeowners that find themselves in this situation. FHA, formed in 1934 and part of the U.S. Department of Housing and Urban Development is waiving its 3-year foreclosure awaiting period. All homeowners with FHA case numbers assigned after Aug. 25th of 2013 that have gone through a bankruptcy, short sale, foreclosure, loan mod, or a deed-in-lieu can now apply and potentially get approved for an FHA mortgage.

The FHA has the role of being the insurer of mortgages made by lenders that are FHA approved. Since the FHA’s inception, it has insured loans in the entire U.S. in addition to U.S. territories as well as the District of Columbia and holds the record as the world’s largest insurer of loans at thirty-four million loans.

Basic FHA Mortgage Guidelines:

1- Loans must be made by an FHA approved lender

2-Borrowers must be U.S. citizens

3-Borrowers must have a  minimum credit score of  at least 500

4- A down payment of at least 3.5% of the contract price is required on a purchase

5- Income is verified via W-2 or federal tax returns

Within the last several years the FHA has been steadily tightening their requirements since the housing downturn. However, since August 15 of 2013, the FHA has made the decision to ease up on their requirements when it comes to borrowers that have ” experienced periods of financial difficulty due to extenuating circumstances”. Now known as the “Back to Work Program”, the FHA has gotten rid of it’s former waiting periods that were typically followed after a negative credit event.   Here are some examples of negative credit events that can affect someone trying to get approved for an FHA mortgage loan.

* Foreclosure

* Short Sale

* Deed-in Lieu

* Bankruptcy Chapter 13

* Bankruptcy Chapter 7

* Loan modification

* Forbearance agreements

It seems that there are actually some compassionate people running this company. The FHA has come to the realization that sometimes bad credit situations are beyond the homeowner’s control and that someone’s credit doesn’t always reflect a person’s willingness or ability to pay there mortgage. One can only hope that other lending organizations will follow the FHA’s lead.

 

 

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Orlando Foreclosure Discounts Shrinking

Posted on by Jenny Zamora

Orlando Foreclosure properties just aren’t the bargains that they used to be. In August of 2009, the average discount on a foreclosed home was about 24%. As of September of this year, it’s now down to about 7% compared to what a home buyer would’ve paid for the same property in a conventional transaction.

Orlando, which is one of the cities that was hit the hardest by the foreclosure crisis has such a strong demand right now for properties that the discounts are pretty much gone unless the house is in need of major renovations. Our company specializes in Orlando short sales and I can tell you that just about every one of our listings receives multiple offers for the listing price or above.  It’s extremely rare these days that we get an offer that’s lower than the listing price because buyers know that it’s a very competitive market right now. As a matter of fact, about half of our properties end up selling for over the listing price.

Regular homebuyers [not investors] are the main reason for the increased demand for Orlando real estate. Everyone wants to take advantage of the historic affordability, which means the combination between lower home prices and great mortgage rates. This doesn’t mean that you still can’t get a good deal in Orlando, but be prepared to submit multiple offers on multiple properties. It’s because of this that it’s much more work to be a buyer’s agent where you have to show multiple homes and submit multiple offers before you find what your buyer is looking for. It’s very common these days to go see a house that has been listed for less than 24 hours and find out that the home already has multiple offers on it.

Orlando Re-Habbers Still Turning a Profit

The average home buyer wants nothing to do with remodeling a home after they’ve purchased it. This is why there’s soo much competition for Orlando homes that are move-in ready. However, for the home buyer that is willing to roll up his or her sleeves and dive into some major home repairs, there’s still a profit to be made. There are some lenders that will complete the renovations on their own foreclosed properties before putting them back on the market, but most of the time they just want to sell them as-is.

Homes that are in need of repairs can still be good investment opportunities if you know what you’re doing. Using an experienced Orlando realtor to help with your search is highly recommended. It’s also important to know what repairs need to happen and how much the repairs will cost before you commit to buying a fixer-upper. Although profit margins are quite a bit smaller than they were a few years ago, a full-time rehabber can still make a decent living from flipping houses.

 

 

 

 

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Newer Homes Preferred by Orlando Real Estate Buyers

Posted on by Jenny Zamora

 

 The real estate scenario in Orlando is a flurry of activities with new homes coming on top in a competition for the buyers. This has created a unique opportunity for the sellers, especially for those selling homes that were built in the 90s, with buyers indulging in a bidding war for these properties. As far as Orlando short sales are considered, the buyers seem to have a lot more negotiating strength when pursuing older properties compared to brand new ones. This is because when it comes to the new properties, they almost certainly get tough competition from affluent buyers.

Analyzing the trend

 The current trend seems to be driven by all sorts of investors, those that are aiming for resale, as well as rent. A report released last month suggests that these investors have been responsible for the inflation in the housing market in Orlando, as far as prime residential properties that were built since 1990 are considered. This could be partial because houses built over two decades ago are often considered to be less appealing as they are more likely to require upgrades and repairs. However, this is something that is not necessarily true as even newly built properties could be in a worse condition as compared to some of the houses built in 90s that are still in excellent shape. 

These older homes can also be highly appealing, especially in pristine neighborhoods in Orlando real estate. However, the overall demand for properties in Orlando has been for greater newer properties. Orlando real estate comprises of about 30% of the houses that have been built since the year 2000. However, only 34% of the sales have been taken place in this group. The report also suggests that a similar trend has been observed for houses that have been built between 1990 and 2000.

One of the distinctions between the newer and older neighborhoods is that most of the homes that are rich in equity are not listed for sale, as compared to houses in areas that have been heavily hit by foreclosure since 2008. Buyer interest for homes built before 1990 has only diminished further;. these houses, which comprise of more than 50% of the real estate properties in the area,  have only made up for as much as 41% of the sales recorded so far, reflecting a negative impact on the market.

 

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Choosing the right Orlando neighborhood for Re-habbing a House

Posted on by Jenny Zamora

Which type of Orlando neighborhood is best for rehabbing a house?

When you’re looking for an investment home that you intend to flip for a profit you should know that choosing the right location is just as important as choosing the right home. Although it’s true that there are buyers for just about any area in Orlando, certain areas are more desirable than others making it easier on the investor.

Qualities to look for

When considering the neighborhood for a flip, there are some statistics that you should research about the area.

* Make sure that recent sales in the area are homes that sold quickly.

* Ensure that the neighborhood is mostly owner-occupied and not a mostly rental community.

* Homes in the area have maintained their values or even better, they are going up in value.

* Not many houses for sale in the area, too many houses for sale is never a good sign and creates competition for your house when it’s time to sell.

* Be aware that older homes will need much more work to get ready for the market.

 Try Keeping it Close to Home

When you make the commitment to re-hab a house you should know that even if you hire a general contractor to do all the work you will still be making frequent visits to the property. By rehabbing a property in your own area, not only will you have less driving time to get to the property but you’re probably already a bit about the area making your research easier.

However, the area must still be holding its value or going up or it just won’t make sense. A neighborhood that has falling property values because of crime, new highway construction, etc. is never a good choice no matter how close it is to your house.

 Hire an experienced Orlando Realtor

 By utilizing the skills and expertise of an experienced Orlando realtor to find your investment home, you can cut out a lot of the legwork. Realtors not only have access to the MLS but they are also able to provide you with the facts that you need about the area to make the right decision. A good realtor will be familiar with the area as well as the houses thus being able to give you valuable advice that will ultimately translate to more dollars in your pocket when it’s time to sell.

It’s also a good idea to list the property once you’ve finished the repairs. Listing the property with a realtor will give your property maximum exposure to buyers that are currently searching in the area. It’s always a good idea to interview several Orlando realtors before making your decision on which one is the best fit for you.

 

 

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