Realty World – Franklin Real Estate Group – Ed Favinger, Broker CRS, GRI

What do you mean I don’t qualify for a loan… are you nuts….? 

 I make over $100k a year,  have an 800+/- FICO,   AND…  Several Million in the Bank!

That’s exactly just what Mr. Phillips was told by Wells Fargo Bank  recently.  He’s in contract with us to purchase a duplex in the area and while waiting for the Short Sale approval,  was going through a “refinance” on a duplex he paid cash for about 6 months ago.

Because of the “new lending rules” regarding investors, Mr. Phillips had to wait 6 months just to be able to even put in an application to borrow some money on this property.

The property was appraised at over $230,000 and he only wanted to borrow 60% of this amount.. about $138,000 maybe a little more and use this money for a down payment on a new investment.

Wells Fargo is offering fixed rates at about 6%,  30 year fixed or maybe a little lower, but Mr. Phillips doesn’t qualify because his income is all passive.

Let me tell you that Mr. Phillips has had this problem in the past because I have described him in earlier posts to this blog. 

By the way… He can get a loan… but it won’t be at the rates a person who has a W-2 type employment would ordinarily qualify for.   No,  Mr. Phillips, inspite of his net worth, low debt and high FICO scores doesn’t qualify for the “best available” rates.    Mr. Phillips deserves 12% and higher in loan rates..!  Isn’t that amazing…? 

What is the “effect” on the Real Estate Market when this occurs hundreds of times over in this area..?  

Well… someone once told me the average income multiplyer that occurs for every real estate transaction is around $30,000 and higher.   Because, not only are commissions paid to real estate agents.. fees go to title insurance and escrow companies, city & county taxes & fees,  loan companies , pest control companies, roofers, furniture companies, movers, inspectors and appraisers, contractors, and suppliers are all a part on just one deal in most cases.

In Mr. Phillips’ case, he’s taking a 2nd look at this new deal because his rate of return of his investment  is being devalued only because he’s been a success.

When you slow down people like Mr. Phillips…?  you slow down the recovery of the Real Estate market and the rest of the economy.   Ask around you’ll hear lots of stories like these.

Does that make sense to you…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI         favinger@rwnetwork.com    916-203-1260

July 14th – about 8:45 PM

Bread and Butter Four Plexes with Cash Flow Potential:

If you are a return visitor here you probably have not seen too many Four Plexes on this site that I have analyzed.  If this is your first time here because you are looking for an investment, I hope you find the information here useful and informative.

I may not post a daily entry to this blog here, but I will update this site at the ED’S HOT PICKS page frequently.   If you go there now you will find two potential Four Plexes listed under Roseville that I have provided Cash Flow analysis estimates.

I am very familiar with this area.   These Four-Plexes are what I call a Bread and Butter type investment… meaning they don’t have a lot of amenities such as central heat and air, individual laundry hook ups, fireplaces or sometimes even a dishwasher.

However, they are located in Roseville surrounded mostly by single family homes.

Both of the properties that I analyzed need some work on the curb appeal and the usual interior fix up.

If you are a long term investor and like to fix up properties and upgrade them, there have been other investors in the area that have done just that.  I’ve seen them add Central Air, upgrade landscaping and provide covered parking all of which does help to get a better quality tenant.

Bookmark this site and come back from time to time to see new postings on ED’S HOT PICKS

In the mean time…?

MAKE IT A GREAT DAY…!!!