Archive for the ‘Buying a Home’ Category

Source: TJ Jenkins from Home Team Lending in Greeley CO

Do you have questions about appraisals? Tonja Jenkins, from Home Team Lending in Greeley CO gets asked about appraisals quite often. So she decided to ask their in-house appraisal manager to answer the questions they hear the most. Here they are!Do you have questions about appraisals? Tonja Jenkins, from Home Team Lending in Greeley CO gets asked about appraisals quite often.  So she decided to ask their in-house appraisal manager to answer the questions they hear the most. Here they are!

Q: Is there a big difference between Conventional appraisals and FHA appraisals?

A: They’re more similar than most people think. Some people have the false impression that using a Conventional appraisal is a way to skirt what they think are stricter FHA standards. As it turns out, Conventional appraisals are more similar to FHA standards in terms of safety, soundness, or structural integrity than most people think.

Q: Is it safe to assume that all conventional appraisals can be completed “as is”?

A: No. There are certain situations where homes with incomplete items and/or conditions that affect the safety, soundness and structural integrity of the property will be required to be repaired prior to closing.

Fannie Mae’s official statement is:

When there are incomplete items or conditions that do affect the safety, soundness, or structural integrity of the property, the property must be appraised subject to completion of the specific alterations or repairs. These items can include a partially completed addition or renovation, or physical deficiencies that could affect the safety, soundness, or structural integrity of the improvements, including but not limited to, cracks or settlement in the foundation, water seepage, active roof leaks, curled or cupped roof shingles, or inadequate electrical service or plumbing fixtures.

The appraisal report must identify and describe physical deficiencies that could affect a property’s safety, soundness, or structural integrity. If the appraiser has identified any of these deficiencies, the property must be appraised subject to completion of the specific repairs or alterations. In these instances, the property condition and quality ratings must reflect the condition and quality of the property based on the hypothetical condition that the repairs or alterations have been completed.

Q: Can homes with paint issues be appraised as is?

A: It depends – if the home has peeling and chipping paint, but the underlying surfaces are not exposed to the elements, repainting is not required. However, if any of the underlying surfaces are down to “bare wood”, these areas will need to be repainted. This constitutes a soundness and/or structural integrity issue as prolonged exposure to the elements could cause rotting to the structure.

Q: Does negative drainage around the foundation of a home require repair?

A: In most cases, yes. This would result in the possible water collection and seepage along the foundation walls which could result in settlement and/or cracking.

If you have more questions on appraisals call Tonya Jenkins (TJ) at Home Team Lending at 970-336-1185 or contact us or visit our website at www.westrealtynoco.com

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Rehab or Rent Out? Real Estate Investment Tips for Beginners


With mortgage rates still hovering near historic lows, more people are turning to real estate investments as a way to build and preserve wealth. Whether you start fixing and flipping properties or buying and renting them out for monthly cash flow, either investment style can make your money work harder for you.


Before you start investing in real estate, it’s important to line up professionals to help you make offers when you find them. Among your team members, you will want to include:


            A savvy, local real estate professional


      A mortgage broker or banker to help you get financing


      A real estate attorney to write and reviewing contracts


      An appraiser who knows the market and will help you get a correct property appraisal


      An accountant who is well versed in real estate investments


      A good contractor, for rehabbing or repairs


 Then, you’ll need to determine your real estate investment style.


 Rehab or wholesale properties for short-term ROI


The advantage of flipping properties is that you can end up with a good return on investment(ROI) in the short term. For example, you buy a property for $100,000, and invest $50,000 into repairs. Once it’s rehabbed, your property is valued at $200,000, and you sell it for a $50,000 profit.


Once you know where to find rehab opportunities, you can easily repeat the process by reinvesting proceeds from a previous flip into the next property. This is where working with savvy real estate professional can help. They can help you find the right fixer-uppers that may be under market value. A Realtor will have access to many properties that may not be publicly available.


When you are evaluating a property, you will need to look at the whole picture to ensure it will bring you a profit once you resell it. Beyond the actual purchase price and rehab costs, your budget should include carry mortgage payments, property taxes, utilities, and insurance. If it looks good on paper, you can get your real estate team to help you quickly make the offer.


Buy-and-hold rental properties for monthly cash flow


If you find the right long-term buy-and-hold rental property, you can earn consistent cash flow each month. However, you’ll need to carefully review the operating expenses on the property and what tenants are willing to pay for the space to know if you’ll make or lose money each month.


Does your long-term investment make sense on paper? In other words, you will need to understand if your monthly cash flow will be positive or negative.


For example, say your total costs to buy a duplex was $20,000, including down payment and closing costs. You can rent each of the units for $600. Assuming your building is 100% occupied, you’ll make $1200 per month in income. Your expenses include mortgage payments, taxes, insurance, utilities, and management fees, and you want to set aside some cash each month for capital expenditures and routine repairs. You calculate that your expenses add up to $1100 per month. Once you subtract your expenses from your income, you’ll have a positive cash flow of $100 per month.


You can also add amenities, such as coin laundry and vending machines, to increase your potential monthly income. If your property has space to add a billboard, you can earn advertising revenue from renting that space, too. And when you decide to sell, your property’s value will likely have increased both from the overall rising property values and by the improvements you made to increase the cash flow.


Where should I start investing?


Contact us at West Realty by calling 970-631-7111 if you want to learn about investment properties in your local area. We can help you find the right properties that will fit into your budget and your overall goals.








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We’re here to help first time homebuyers sift through the myths and the truths about buying your first home. West Realty wants you to be a smart homebuyer and will inform you about the whole process at every stage.

Learn about:
What’s your price range?
Balancing Budget and Home Size
Process Details
The Closing Process
Myths and Truths

Get started today and before you know it, you will be in your first home.  How exciting!! If you have any questions, always feel free to call Bev at 970-631-7111.

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