How to evaluate and find a good investment/rental property.

There is no doubt that the current economic condition our country is in is far from what many people picture as a healthy and vibrant economy. With high unemployment, rising fuel costs, the limping housing market, and the multitude of banks and other businesses that are failing...our country is struggling to nurse our economy back to a healthy state. However, one thought to ponder is this... and I quote "during an economic recession, money does not disappear, it simply changes hands."

What this means is that even though an economic recession causes a lot of people financial problems, it also creates great opportunities for some others to make money. One great opportunity to make money right now is that of purchasing investment property for the purpose of generating rental income. Home prices are reaching lows that we have not seen for almost 10 years. Many reasons have contributed to the decline that we have seen in home prices. It is harder to get a loan to purchase a home now days, which has caused demand for homes to come down, thus decreasing home prices. Also, many banks that have foreclosed on properties are selling these foreclosed homes for much below market value because they want to get these "non-performing assets" off their books as quickly as possible. When banks do this, it also contributes to depressing the values of the homes around the homes they sell.

While home prices have come down, demand for rental properties has remained very stable. With less people able to buy homes now days due to stringent lending standards, there are now more people looking to rent. Also, there are millions of people who are losing their homes to foreclosure in our country, and these people are also now looking for places to rent. With that being said, demand for homes to rent is still strong.

With prices for homes being very low and rental rates still high, it is now easier than it has been in a long time to purchase a property, rent it out and have the rental income exceed the mortgage payment and other expenses of owning the home. There is now a tremendous opportunity for people who have a lot of idle cash and good credit. These people have the ability to buy property for very cheap, rent the property out and make a strong return on their investment. I have had the opportunity to help several investors purchase properties for great prices. These investors were able to rent out their properties and earn return on investments of around 9% or 10% a year. This is a way better return than can be earned by keeping your money in a bank. Also, keep in mind that the return of 9% or 10% does not even take into account the increase of the value of the property itself over time. I know it is hard to believe right now, but yes, property values will begin to increase again.

So if you are one of those people that has some money to invest and you have good credit, what do you need to do to begin finding great investment property that you can earn a high return off of? First off, you need to figure out how expensive of a property you can buy. If you plan on purchasing a property with all cash, it is very simple. You just decide how much cash you are willing to spend on a property. If you are going to take out a loan to purchase a good investment property, you can go to a local lender and after evaluating your income, expenses, assets and credit score, he/she can tell you what you can afford to spend on a property.

The second thing you need to do is get familiar with rental rates in your area. You can do this by talking to a competant real estate agent or property manager in your area. You can also get a good idea of rental rates by searching online at properties that are for rent.

Once you have figured out how much you can afford to spend on your investment property and you have become familiar with rental rates in your area, it is time to locate some potential properties. When you are searching for the right property, you have to take several things into consideration. The first thing is location, location, location. In my book, this is the number one thing to look at. A good location is going command a higher rental rate, it will make it easier to sell the property in the future and it will make it much more likely that the value of the property will appreciate over time. The third thing to look at is the condition of the property. If the property is very cheap, but you have to sink a lot of money into it, it might not be a good deal. However, there are times where you can get a very good deal on properties that need fixing up, so you just have to evaluate the property on a case by case basis and make a good business decision. Getting educated on property values in different areas of your town can help you with making this business decision. A competant REALTOR should be able to help educate you on property values in different areas in your city.

Once you have figured out what you can afford to spend on a property, you have become familiar with rental rates in your area, and you have located a few good canidates for investment properties, it's time to figure out your projected rental incomes and projected expenses for each property. Figuring out the the projected rental income for the properties you are interested in is fairly easy. Just find out how much the rental rates are for simalar properties in the same neighborhood. You can do this by knocking on doors and asking residents what they pay for rent, or you can search online or call the "for rent" signs in the neighborhood and inquire about how much people are asking for rent.

Figuring out expenses is a little bit more involved. Here are the following expenses you are going to have to account for and how you can figure them out.

1. Principal and interest expense (if you get a loan to buy the property)- You can figure this out by plugging the numbers into a financial calculator. You just need to know how much money you will be borrowing, what your interest rate is for the loan, and how long of a period the loan is amortized over (i.e. 30 years, 15 years) If you don't want to figure this out on your own, call your lender and they can tell you what this expense will be.
2. Taxes-You can get a very good estimate of your tax expense by calling your local property appraiser's office. Taxes are figured out by multiplying the sale price of the property by the millage rate in the area the property is located. So if you know these figures, it is easy to figure out on your own.
3. Insurance-You can figure this out by calling your insurance agent. It is sometimes good to get a few different quotes from different companies.
4. Homeowners association or condo association fees-Some properties are located in communities that charge association fees. Usually for the fees, the association will take care of things like road maintenance and lawn care in the neighborhood. Condo associations usually have the highest fees, but you also get more for the high fees you pay for. To find out what the association fees are in a given neighborhood and what the fees cover, you should contact the homeowners or condo association that the property is located in directly.
5. Misc Maintenance expenses-A good rule of thumb is that yearly maintenance expenses will be about 1-2% of what you purchase the property for. This expense can vary depending on how old the property is, what the condition of the property is like and how much maintenance (if any) your homeowners or condo association takes care of. For instance, most condo associations are responsible for the roof. So if this is the case, you do not have to budget for replacing your roof.

Once you have figured out the property's projected rental income, and you have figured out it's projected expenses, you can figure out what the property's annual return on investment will be. You subtract your yearly property expenses from your yearly rental income to give you your yearly net cash flow (hopefully it's positive). You next divide this yearly net cash flow by the purchase price to give you your annual return on investment. If your projected return on investment is acceptable to you and you like the property, you can next proceed to making an offer on the property.

I have successfully helped several investors locate and purchase lucrative investment properties. If you have any questions about buying rental properties please feel free to give me a call at (850) 567-0037 or email me at nahoom1171@yahoo.com

Look out for rising Mortgage Rates After March 31st.

After March 31, The Fed has announced that it will stop buying mortgage backed securities from both Fannie Mae and Freddie Mac, which will in turn possibly cause interest rates on home loans to rise.

Last year, as a result of the of the mortgage crisis and as a result of the Government takeover of two of the largest companies in the secondary mortgage market, The Federal Reserve began purchasing mortgage backed securities from Fannie Mae and Freddie Mac in order to keep the secondary mortgage market liquid so that lenders could continue to issue loans. The Fed purchasing these mortgage backed securities was a way to keep interest rates low so that demand for purchasing houses would increase and continue to remain high. However, as of March 31st, the Fed will no longer continue to purchase these mortgage backed securities from Fannie Mae and Freddie Mac, which means it will make it harder for lenders to issue loans and sell them into the secondary mortgage market. There is a good possibility that this will drive interest rates on home loans up. To better understand this, it might be helpful for me to briefly explain how the secondary mortgage market works, and how it affects interest rates. I will also explain what mortgage backed securities are. Once you get an understanding of these concepts, you will better understand the Dramatic effect that could take place once the fed stops purchasing mortgage backed securties from Fannie Mae and Freddie Mac on March 31st.

When a lender makes a home loan to a customer, it is rare that the lender keeps that loan in their own portfolio. Usually what happens is first the local lender makes a loan to Suzie Homeowner. This lender is part of what is called the primary mortgage market. After this lender who is involved in the primary mortgage market, issues the loan to Suzie Homeowner, that lender sells the loan off to another company who is involved in the secondary mortgage market, such as Fannie Mae. This system is good for lenders in the primary mortgage market, because they make the fees off of initiating the loans, and then they sell the loan to a company in the secondary mortgage market, and the bank who initially made the loan gets their cash back so that it can make more loans to other customers and in turn make more money on loan fees. So you see, the banks in the primary mortgage market make a lot of their money on the fees from initiating the loan, and then they sell the loans to companies in the secondary mortgage market.

The companies in the secondary mortgage market buy hundreds, thousands and even millions of these home loans from lenders who initiate these loans. The companies in the secondary mortgage market can either hold these loans on their books and earn money on the interest received from the loans, or they can package these loans up and sell them to investors as mortgage backed securities. You are probably asking "what the heck is a mortgage backed security?"

A mortgage backed security is a lot like a share of stock. It is a trading security that is actively traded in the open market in the same way that stock is traded. A share of stock is backed by the value of a company. A mortgage backed security is backed by the value of many mortgages that have been pooled together. Mortgage backed securities are created when companies in the secondary market pool together many mortgages that they own and create securities (called mortgage backed securities) that are backed by the value of these pooled loans. They in turn sell these securities to private investors much like companies sell stock to private investors.

This whole process that starts off with the local lender making a loan to Suzie Homeowner, and that ends with investors buying mortgage backed securities, is what enables banks to continue making loans at affordable interest rates.

However, in 2008, Fannie Mae and Freddie Mac ( the two biggest companies in the secondary mortgage market) began having bad problems because many of the loans that they purchased from lenders in the primary mortgage market, began to default. These bad loans made it so investors stopped buying mortgage backed securities from Fannie Mae and Freddie Mac. This eventually led to Fannie Mae and Freddie Mac ending up on the brink of failure, which led to the government taking them over.

The government believed that Fannie Mae and Freddie Mac needed to continue. This was because these companies played such a large role in the secondary mortgage market industry. If Fannie Mae and Freddie Mac failed, it would make it much harder for local lenders to make loans and sell them off into the secondary mortgage market. This would mean that local lenders would have to start holding more loans in their own portfolios. This means lenders making loans would have to take more risk, which means they would charge borrowers higher interest rates. These higher interest rates would reduce demand for purchasing houses, which would be bad for the economy. At the time this was going on, this could have sent our country into a depression.

To prevent all of this from happening. The government got The Federal Reserve to start buying up Mortgage backed securties from Fannie Mae and Freddie Mac. This in turn enabled Fannie Mae and Freddie Mac to continue to buy mortgages from lenders in the primary mortgage market, which enabled lenders to freely make loans at low interest rates. However, after March 31st, the Fed will not continue to buy mortgage backed securities from Fannie Mae and Freddie Mac.

After March 31st, we will be relying on private investors once again to start purchasing mortgage backed securities from Fannie Mae and Freddie Mac. Some think the private investors will start buying mortgage backed securities again from these companies because lending standards are much higher now, which would make the loans that Fannie and Freddie have in their portfolios, good loans. However, would you buy stock from a company that just emerged from bankruptcy? I would not. It's the same concept.

It is very likely that private investors will be very weary about buying mortgage backed securities from Fannie and Freddie. Again, this will make it harder for lenders who make loans, to sell the loans into the secondary mortgage market. This will drive up interest rates on home loans. Higher interest rates will mean less demand for housing and will possibly lead to a further decrease in home values.

If you are thinking about buying a home. I would find a home as soon as possible and lock in a low interest rate before they go up after March 31st. If you have any questions on this subject, please feel free to email me at nahoom1171@yahoo.com or give me a call at 850 567-0037

Foreclosures and Shortsales. What you should know

Today I will be talking about foreclosure sales and short sales. In today's real estate market, our housing inventory is loaded with distressed properties. Both short sales and bank foreclosed homes are sitting on the market waiting for buyers to come along and move in. While you can get a great when you buy one of these properties, you also must understand that buying one of these properties entails more risk.

Before I get into talking about short sales and foreclosure, I think it would be a good idea to define what a short sale and a foreclosure property are. A foreclosure property is when a bank has already seized the property from the last owner of the property because the previous owner was not making his/her mortgage payments. The property is now owned by the bank.

With a short sale, the current owner has a mortgage on his/her property, but the fair market value of the property is less than what they owe on their loan to the bank. Also, property owners are also usually behind on their mortgage payments when they want to do a short sale. When a property owner is in this situation, and wants to sell his/her home, they negotiate with the bank to accept an amount of payment from the sale of the property that is less the the amount of money they owe the bank for their home loan. Banks have incentive to take less money than the property owner owes to them because they do not want to foreclose on and repossess the home. It costs the banks a lot of money to foreclose on a home, so by working a short sale, the bank avoids the foreclosure expenses.

As I mentioned, you can get a great deal when you buy a short sale or a foreclosure property.

FORCLOSURES
With foreclosed properties, banks own the properties and are paying taxes and insurance on these properties every month. In addition to that, these properties have a high opportunity costs to the banks. Instead of having these "non performing assets" as banks call them, on their books, they would rather sell them and have cash to make more loans with. All these things I have just mentioned make banks motivated to sell these properties. If you have cash to purchase a property, and you can close on the deal quickly, there is a good chance you can get a great deal on a foreclosure property. Banks like it when buyers purchase properties with cash because they do not have to worry about the deal falling through because the buyer's home loan financing falls through. Banks also like quick closings because the faster they sell the property, the less money they have to pay on taxes and insurance related to the property.

However, just because you can find a great deal on a forclosure property, it does not mean the bank is going to give the property away. Banks do their due diligence in order to find out the value of the property that they own so that they can get fair market value or at least close to fair market value when they sell the property. Banks usually have a real estate agent, in the town where the property is located, go ahead and list the property for sale. The listing agent will use his/her knowledge of the local real estate market to list the property at fair market value. Also, banks will sometimes have an appraisal performed on the property by a liscensed property appraiser, to find out what the value of the property is. I have had clients who have gotten great deals on forclosed home, and I have had clients, who have put offers on foreclosed homes, have their offers rejected by banks.

When you are buying a foreclosed property, you are taking a larger risk than when you buy other property. Banks own these homes. However, the banks usually do not know anything about these properties, and they almost always make buyers purchase the homes in "as is" condition. This means that it is up to the buyer to verify everything that is wrong with the property before purchasing it. When purchasing a foreclosure property there are a few things you can do to minimize risk. First off, work with a competant real estate agent who has worked with foreclosure properties before. Second, make sure that you have the property inspected by professionals before purchasing the property. The inspections I would recommend include include a general home inspection performed by competant home inspection company, and a wood destroying organisms inspection. If you need any other inspections done, the general home inspector should let you know. You can visit http://www.bobbynahoom.com/ to find home inspection companies that I suggest using. In addition to inspections, you need to have a survey performed on the property to make sure there are no encroachments on the property. You also need to have a title search done on the property to make sure that you are buying the property with clear title. You should purchase a title insurance policy as well which will protect you from title defects if any pop up that are not found in the title search.

Going through a foreclosure is much like buying a normal property, but instead of dealing with a seller that has lived in the property or at least seen the property, you are dealing with a bank who has never seen the property. The time frame to close for a foreclosure is the same as a normal sale. When you are buying a foreclosed property you must prove to the seller bank that you either have the funds to purchase the property or that you have been approved for a loan to purchase the property.

SHORT SALES
While foreclosures are a little more risky than normal sales, they are a lot less complicated and time consuming than short sales are. When you are purchasing a short sale, you are dealing with two parties. You are dealing with the actual owner of the property, and you are dealing with the bank that the property owner has their home loan through (remember this is because in a shortsale the bank has not repossessed the owner's home yet, so they are not officially the owners). You have to get both the bank and the property owner to agree to the offer you make. In short sales, banks usually take a while to approve the offer. This approval process usually makes the short sales take a longer time. When you go to purchase a short sale, expect about 60-90 days before you can close and move in to your home.

There are usually less unknowns with a short sale as opposed to a foreclosure home because you are dealing with a property owner who usually knows about the property. However, you still need to perform your due diligence to make sure you know as much as possible about the property before you purchase it. Again you should work with a REALTOR who has experience with short sales, get inspections done, a survey done, a title search done and get title insurance. Short sales are usually sold "as is" but sometimes the seller's will perform repairs.

In summary, there are a lot of short sales and foreclosed properties for sale right now. You can find great deals when buying these properties, but you need to understand that you must do your homework before you purchase one of these properties.

If you have any other questions about short sales or foreclosure properties, please feel free to call me at (850) 567-0037 or email me at nahoom1171@yahoo.com

Tallahassee Real Estate Market Update-things are looking good!

Despite the doom and gloom that everyone is hearing about in the news these days about real estate, there are some areas throughout the country where real estate markets are improving. By nature, real estate markets are unique from city to city and from town to town. With that in mind, you must realize that the doom and gloom you hear in the media about the real estate cannot be true for everywhere. In fact a perfect example is Tallahassee's Real Estate market. The real estate market in Tallahassee seems to be doing pretty well.

As a REALTOR, I have access to market statistics for Real Estate here in Tallahassee that are provided to me through the Tallahassee Board of Realtors. This past week I have taken the liberty of doing some research to find out which direction our local real estate market is headed in. In my research, I divided up houses both by area and by price range. I divided up Tallahassee into 4 quadrants, Northeast, Southeast, Northwest and Southwest. The price ranges I used were from $0-$125K, $125K-$250K, $250K-$375K, $375K-$550K and $550+. I compared market statistics on houses in each of these price ranges and in each area for the last quarter of 2008 to the houses in each price range and in each area for the last quarter of 2009.

As a whole, the number of houses on the market in Tallahassee has decreased from last year, and the number of homes sold has increased from last year. With housing inventory down and sales up, this is a strong indicator that demand for homes in Tallahassee is increasing, and our real estate market is on it's way back to being healthy. Here are a few examples to illustrate my point. On the northeast side of town for properties under $125,000, the ratio of homes sold over number of homes listed for sale on the market increased 29% in the fourth quarter of 2009 compared to the fourth quarter of 2008. Another example can be seen for homes priced between $125,000 and $250,000 located on the southeast side of Tallahassee where there was a 45% increase in the ratio of homes sold over the number of homes listed for sale on the market. The increase in this ratio of homes sold compared to homes listed for sale has taken place all throughout Tallahassee. For houses above $550,000 the increase in this ratio for 2009 is smaller compared to the increase in this ratio for homes in the lower price ranges. Again the increase in the ratio of homes sold over homes on the market for sale means that more homes are selling and inventory of homes is decreasing. This is a good sign of increasing demand which is what ultimately leads to home values increasing.

As a whole, Tallahassee has seen a small reduction in the value of homes in the last year, but the losses in value are small and it appears that prices are bottoming out. In some areas of Tallahassee though and in certain price ranges, home values are actually increasing! Yes, you read that right, increasing. For instance,  for homes priced between $250,000 and $375,000 located on the northeast side of town, home prices were 1.3% higher on average in the last quarter of 2009 compared to the last quarter of 2008. Another example are homes located in northwest Tallahassee that are in the price range of $125,000 to $250,000. In the last year, these homes have seen an increase in value of 1.5%. There are also a couple other examples of homes in certain price ranges and in certain areas where small gains in value have occured in the last year. In all of the other areas and price ranges, prices have either remained flat or have experienced small decreases in value. This is a far cry from what the media is telling us though.

The last value that I looked at when doing my market research was the average days on the market for homes before they sold. This is another number you can look at to assess what demand is like.  When this number is high, usually it means demand is weak, and when this number is low it usually means demand is high. Overall the numbers show that about half of the subsets ( homes in certain areas and certain price ranges) of homes throughout Tallahassee have seen decreases in the number of days in takes to sell a home, and other half of the subsets have seen increases in the number of days that it has taken to sell a home.  Here are a few examples.  On the Southwest side of town for homes priced from $125,000-$250,000 the average number of days on the market before a home sold decreased by 74days in the 4th quarter of 2009 compared to the 4th quarter of 2008.    For homes priced between $375,000-$500,000 on the northeast side of town this number increased by 39 days in 2009, and for homes priced between $0 and $125,000 on the northwest side of town this number increased by 39 days as well. 

While Tallahassee's Real Estate market is still not as good as we would like it to be, it is headed towards recovery.  Although home prices overall are slightly down, and the number of days it takes to sell a home is about the same as last year, the number of homes sold has increased and the amount of homes listed for sale has decreased.  This shows that demand for homes is picking up and the supply of homes is going down which means it should not be too long before we see home prices starting to increase overall throughout Tallahassee.  As mentioned before there are homes in some areas in certain price ranges that are already increasing in value.  With the tax credit deadline for first time and repeat homebuyers coming up at the end of April, we can expect to see a surge of demand for homes in the next couple of months.   Because of this, right now might be a great time to list your home in Tallahassee for sale if you are thinking about doing so.

Home improvement projects with the most bang for your buck.

Hello Everybody,

Today I will be discussing a few of the most profitable home improvement projects of 2009. This information comes from the 2009 Cost vs. Value report created by Remodeling Magazine.

Replacing an entry door was the most profitable home improvement project of 2009. The average cost of replacing a front entry door was $1,172 and the average return on investment was 128%. This high return on investment indicates that first impressions are very important to homebuyers.

Adding an attic bedroom is also another smart home improvement if you are looking for some more space in your home. This is one of the more expensive home improvement projects that a homeowner can perform, but the return on investment for this project is not bad coming in at 83.1%.

Looking for more space to entertain? Adding a wood deck is a great solution to that problem. It's average cost to add wood deck to a home was a little above $10,000 in 2009, and the return on investment for that project was 80.6% in 2009.

Mid-range bathroom and kitchen upgrades also proved to be a smart home improvement upgrade in 2009 with an average return on investment of 71% and 72% respectively. Upscale bathroom and kitchen upgrades had a return on investment of about 10% less than the mid-range kitchen and bathroom upgrade.

Is it time to replace those old windows? Go ahead and replace them with new vinyl windows. The average return on investment for this project in 2009 was 83.6%

Finally, replacing your siding with fiber cement siding also proved to be a financially sound home improvment project with an average return on investment of 76.5%.

To see the cost and return on investment of all of the home improvement projects, visit http://www.remodeling.hw.net/2009/costvsvalue/national.aspx

New FHA 203 K Mortgages to buy and fix homes.

Hello Everybody,

Today I will be discussing a great new FHA mortgage that can be used to purchase and fix up homes. This loan is called the FHA section 203K mortgage.

OVERVIEW OF FHA 203K MORTGAGES
In today's real estate market, we face a challenge because there are a lot of homes for sale that are in need of being fixed up in order to for them to be habitable. Many of these properties can be purchased for a great price, but after the homeowner purchases the home, they either have to have the cash to fix up the properties or they have to take out construction loans to fix up the home. These loans a lot of the time have interest rates that are a good bit higher than a typical 30 or 15 year fixed rate mortgage. Also, a lot of construction loans have balloon payments where the person who takes out the loan has to make a very big payment to pay back the majority of the loan at one time. Because of this situation, many of these "fixer upper" homes, which a lot of the time are bank owned properties, are never purchased and just sit on the market.

The new FHA 203k mortgage helps people who would like to purchase a home for a great price and fix it up. The mortgage amount includes the purchase price of the home plus the amount of money that it will cost to fix up the home. This is great because this means that the homeowner does not have to deplete his or her cash or obtain expensive construction loans to fix up their home. The cost of fixing up the home is amortized into the monthly mortgage payments at an interest rate just a little bit above a normal FHA mortgage loan. The new FHA 203K mortgages can also be used to refinance a home as well.

HOW IT WORKS.
The way that the new FHA 203K works is as follows. First, you locate the property that you want to purchase, and you write an offer on the property for a price that you think is fair. Once you have an executed purchase contract, you submit the contract along with estimates of how much it will cost to fix up the home to your FHA approved lender. There has to be at least $5,000 worth of repairs in order for a person to qualify for this loan. Once you close on the home, part of the loan proceeds go to pay off the person selling the house, and the other part of the loan proceeds go into an escrow account where it is held to pay for the repairs needed to be done to the home. The new homeowner draws the money out of the escrow account as he or she makes repairs to the home. You do not have to take the money out of the escrow account all at once at the end of the completion of all of the repairs. You are allowed to make repairs in steps and take money out of the escrow account as you go. You do have to have cash to make the initial repairs, and when you draw money out of the escrow account, you are being reimbursed for those repairs.

WHAT TYPE OF REPAIRS ARE ALLOWED
The types of repairs that are allowable under the FHA 203 K mortgages are pretty broad. The amount of repairs to be done has to be at least $5,000. The types of repairs that are allowed to be financed with the FHA 203k loan include the following.

• Structural alterations and new construction
• Repairs done to eliminate health and safety hazards
• Changes made for aesthetic appeal
• Installation or replacement of air conditioning system and repairs made to air conditioning system
• Installation of well, septic system, or cost to connect home to public utilities
• Roofing, gutter downsprouts, flooring, tiling and carpeting
• major landscape or site improvements
• improvements made for accessibility and functions for disabled.
• Making energy conservation improvements.

What type of properties are eligible for FHA 203K

Not all properties are eligible for the FHA 203K Loans. Residential properties that have 1-4 units are allowed. This would include detached single family homes, townhouses, condos and the residential portion of mixed use property. You are also allowed to purchase a home and purchase a seperate piece of land and move the home to the new piece of land. The purchase of demolished homes are also allowed as long as some of the existing foundation systems remain in place. Coopertive units are not allowed to be financed under this program.

Condos are allowed to be financed only under certain condtions.

• First off, only the inside of condos are allowed to be rehabilitated. The condo association that the condo is a part of is responsible for maintaining and fixing the exterior of the condo.
• The person purchasing the condo must be the owner occupant or a qualified non-profit borrower. No investors purchasing condos are eligible.
• Each building in the condo project must contain no more than four condos per building
• The condo project must be approved by HUD by no later than closing.
• Only the lesser of 5 units per association or 25% of the total units, can be undergoing rehabilitation at one time.
• The maximum mortgage amount cannot exceed 100% of the after improved value of the condo.

How do I qualify for the FHA 203K Mortgage.

Qualifying for the FHA 203k Mortgage is pretty much the same as qualifying for a regular FHA insured loan as long as the property and the type of repairs to be completed are permissable as mentioned above. The FHA approved lender is going to look at credit score, income, expenses and assets of the borrower in order to approve the borrower for the loan.

How do I get started.

• Select and have a meeting with an FHA approved lender
• Locate a property that you would like to puchase
• Find out what needs to be repaired in the home and get an estimate of the repairs that need to be done
• Find out what the expected market value of the home will be once the work is completed. You can do this with the help of your REALTOR, or you can have an appraisal done by a property appraiser.

Tips on sucessfully staging your home to sell.

In today's buyer's market with tons and tons of houses for sale, staging your home so that it is appealing to buyers is essential if you want to sell your home quickly while still getting the best price possible. Besides pricing the home right, staging your home is the most important thing homesellers can do to make their property favorably stick out in the eyes of potential home buyers. Here is a list of tips for staging your home before you put it on the market for sale. Follow things tips and price your home right, and the showings will come which will lead to selling your home.

House Exterior:

• Your front door greets the prospect. Make sure it is fresh, clean and newly painted, and if needed, has a new coat of linseed oil ( furniture polish)
• Hose off exterior wood and trim. Remove any wasp nests or cobwebs. Clean out gutters if needed. If safe enough, sweep the debris from the roof.
• Repair any torn screens or replace missing ones.
• If gutters or wood trim are in need of paint because of obvious cracking, peeling, or chipping, it is best to repaint those areas.
• If you have window air conditioning units, wipe them clean and remove any rust which may have accumulated around condensation areas.
• If you have an outdoor patio or deck, be sure it is kept swept of leaves or pine needles. Any lawn furniture, gas grills, or exposed wood should be clean and in good repair. Mildew should be removed.

House Interior:

• Examine all woodwork, door frames, and doors to be sure they are free of fingerprints, dust or dirt.
• Keep oven, stove, or surface units, and all porcelain or stainless steel clean. Formica counter tops and cabinet doors should be spotless. Fix any faucet leaks and keep sinks clean. Kitchen accessories on top of counters should be kept to a minimum and be neatly arranged.
• Whether you have any hardwood floors, wall to wall carpeting, linoleum or any combination of these, keeping them clean is important.
• Bathrooms are difficult to keep straight and clean, but they are of great importance in their overall appearance. If grout between tiles has cracked, mildewed or chipped out, re-caulk and use a good cleaning product.
• Replace old furnace or air conditioning filters, and remove any dust accumulation from heat registers or vent covers.
• If doors stick or folding doors are off track, repair them. Review items such as vent covers for loose or missing screws and replace them. Storage is important to any prospective home owner. Crowded or cluttered closets and other storage areas may suggest a storage problem. Clean out closets where possible. It may be a good time for a garage sale! A spacious appearance in any storage area is extremely important.
• If any rooms within the house are dark during daylight hours, keep drapes or curtains open, and if necessary, keep a lamp on. Replace burned out bulbs.
• If repainting on the inside is absolutely necessary, use neutral colors.
• Gleaming, clean windows say a lot about your home and you. Use attractrive curtains, freshly laundered, and keep fresh bedspreads in the bedrooms.
• Don't dump paper or trash in the fireplace. Keep as neat as possible.
• Tighten door knobs, window fittings, and other hardware.
• Don't try to hide problems. Cracks in walls, concrete, broken appliances, roof leaks, wet basements, ect, should be repaired.
• Be sure all steps are free of hazards.

Yard and Grouds:

• Keep the lawn cut and trimmed. Trim Shrubs, if needed. Remove clippings.
• Keep area around garbage cans neat and free of trash.
• Stack wood piles neatly.
• Keep drives and walks swept clean and free of branches, pine needles, leaves, ect.
• Keep surface water drainage areas or natural streams free from debris that may cause water to stand and stagnate.