Real Estate Investors: Buy, Sell or keep up?

Real Estate Investors: Buy, Sell or keep up?




Brandi Brand is Sales Director for Breakwater Mortgage in Virginia

Beach, Virginia. Brandi and her husband, Scott also rehab and resell

real estate investments in Southeastern Virginia. The following interview

consists of shared questions real estate investors have at this time,

when mortgage interest rates seem to be on the rise.

Q: What is the overall tenure of the real estate and mortgage industry in

Virginia at the end of 2005 and leading into the first quarter 2006?

A: The local market has slowed in Virginia over the last six months.

Houses are staying on the market longer. This method more time is

involved for real estate investors who want to sell.

Q: Are the real estate and mortgage markets headed for a downturn

then?

A: The market is nevertheless very strong despite a slight decline in activity. In

Southeastern Virginia, home sales dropped approximately 3% in

November 2005, which indicates a slight adjustment.

Q: Is it a buyer’s market now?

A: Currently, the market is leveling out. When it was a seller’s market,

contracts were signed on homes and similarities before anyone had a

chance to think the buy by fully. Now, investors have the

opportunity to price out necessary repairs and renovations to get the

most return out of the character.

Q: Is it a good time to buy?

A: Yes. The market is adjusting, and there are some great bargains for

the real estate investor. There are always good deals to be found. An

investor is looking to buy character below the market value, this is

how they make a profit. Purchasing a character with cosmetic issues,

rehabbing and reselling is one strategy. Other good deals can be found

with For Sale by Owner real estate.

Q: What makes the Virginia real estate market different from say, the

market in the Northeast?

A: In general the Northeastern market is more expensive than the

Southeastern, with the exception of Florida. Southeastern Virginia real

estate is more affordable, so investors come from the Northeast to buy

here.

Q: What do mortgage lenders look for when they consider writing loans

for real estate investors?

A: A mortgage lender is looking for a strong employment history and six

times the monthly payments in leftover assets after paying money due at

closing. For 100% financing, the applicant can be required to have a

680 credit score or above. Lenders ideally like to see two years of

experience renting similarities if the real estate investor is attempting to

buy multiple similarities. On average a character that brings in a

return of at the minimum $200.00 per month (for maintenance and repairs) is

considered a sound investment. For new investors, edges will be

inclined to limit the investor to two similarities in the first two years.

Q: What are the best real estate markets to invest in?

A: One of the highest areas of real estate investment is near military

bases. Southeastern Virginia has a wealth of bases. Soldiers on their

own often prefer to live in base hosing. Those with families often choose

to rent in order to have more privacy or a yard.

Q: What are the current trends in mortgage financing for real estate

investors?

A: Prior to the summer of 2005, many investors were choosing interest

only loans or 2,3, or 5 year Adjustable Rate Mortgages (ARMS) that

required little money down. Most investors buy a character with 5

years in mind. The value of homes will continue to increase, but

investors see the 30-year fixed loans as more substantial while interest rates

are on the rise. Young investors seem less concerned about rising

mortgage rates. Many seasoned investors remember when the interest

rates were 13-14%, but investors under thirty have not seen comparable

interest rates during their adult lives.

Q: What are the refinancing trends for real estate investors?

A: Many investors are choosing to refinance by moving from a short-

term mortgage to a long-term loan. Investors with rental similarities will

be locking in rates with 30-year fixed loans. Investors who want to

rehab and resell character will be refinancing in order to acquire cash for

another real estate investment. Overall, the refinancing expansion has

slowed down.




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