Archive for October, 2015
Reverse Mortgages in Orange County – Love it or Leave it?
We’ve all heard good and bad about the reverse mortgage market, so today I went to a class given by Dirk Pierce with Retirement Funding Solutions at the OC Register building to find out more information. Knowledge is power, right?! Plus it’s not fair to form an opinion about something until the proper research and due diligence is done.
What is a Reverse Mortgage?
Basically, a reverse mortgage lets homeowners convert a portion of the equity in their homes into cash, and eliminate their monthly mortgage payments.
Interestingly enough, Reverse Mortgages are over 100 years old, and they are also available in Britain, Chile, Canada, New Zealand, Australia, and Korea. They were designed to help people who where house rich and cash poor, and were also known as ‘shared equity’. Fast forward to 1989, and Ronald Reagan helped to create the first government regulated Reverse Mortgage plans under the FHA umbrella.
Another variation of a reverse mortgage is HECM for Purchase; both share similiar features:
- Both are FHA
- Neither have monthly payment requirements
- Both offer adjustable or fixed rates
You’ll use HECM for purchase when you are planning to buy a new property, for example to downsize, etc. Reverse Mortgage is when you stay in your existing home, and simply refinance.
HECM for purchase is an FHA loan that enables a person age 62+ to purchase a home with as little as 40% to 51% down and never make monthly mortgage payments. So basically you can get a 500K home for 250K and never make payments if you meet the age requirements. BUT….interest still accrues on your mortgage balance. The nice thing about the programs is they come with the following protections:
- Guarantee that FHA will honor the terms of the loan if the lender becomes insolvent
- Guarantee that you would never owe more than the house was worth
- Guarantee that there is no personal liability for repayment of the loan by you or your heirs. It is truly a non-recourse loan.
- Guarantees that the loan won’t become due until the last remaining borrower leaves the home.
Frequently there is remaining equity in the home…what happens with that? After the home is sold, any remaining equity goes to the heirs.
Do you qualify for a reverse mortgage?
- minimal credit requirements
- minimal debt to income ratios
What types of properties are allowed?
- single family
- PUD
- 1-4 unit property
- FHA approved condo
- new construction
- NOT second homes or investment properties, sorry!
More reverse mortgage facts:
- Only YOUR name is on the title, so don’t believe the rumors that the bank is on title.
- The loan becomes due when the last remaining borrower leaves the home.
- You can sell whenever you want to, and they do not have a prepayment penalty.
- Family has up to a year to either refinance your property with a normal mortgage or sell it before the loan is officially due.
Reverse Mortgages are all age based, so contact Dirk today if you’d like a chart to see what your down payment would be at your age. Want to learn more? Register for his class at http://www.OCHomeFair.com on Jan 30th, 2016.
Read Full Post | Make a Comment ( None so far )2016 Real Estate Forecast for Orange County
Will you be able to move in 2016?
Today I had the pleasure of meeting Leslie Appleton Young with California Association of Realtors, and hearing a ton of facts and figures about where real estate stands in the state of California. Wow have we come a long way since 2007! Congrats to all of you who held on to your property!!
As of 2015, the housing market has officially recovered, and we’re rolling along at a steady pace. Over 94% of homes were equity sales this year 🙂 Median price is $482,150. Jobs look good; OC is actually #3 on the list up 3.2%, and construction is #2 on the industry list. All great news for housing. But the big question is…
What About Interest Rates????????
Leslie doesn’t really believe rates are going to jump the way other forecasters do. Well that’s good news…if she’s right 🙂 She said there may be an increase next year, but it happens, she’s not expecting rates to go up until March 2016…so you’ve got a little time to get going! (But please note the best time to buy in OC is always Oct-Jan)
Market Stats & Demographics
We are below average with first time buyers in the market right now, less than 30%. On the other hand, over 30% of properties sold this year went to all cash investors. 75% of boomers are homeowners. 20% of millennials are homeowners. The good news is that 43% of all boomers worry about their children’s down payment… and are willing to help their millennial offspring with gift funds. International buyers are actually down to 4% this year, they were at 8% in 2013. 45% of Millennials have NO IDEA if they could qualify for a loan or not. What?! Need to check on that kiddos! 🙂
If you’d like all of CAR’s facts, figures, and 2016 economic forecast click here.
Why aren’t people buying homes?
- Affordability
- Inventory
- Foreclosure pipeline is dry
- Trouble qualifying for a loan
- They’re happy where they are (average time between homes right now is 10 years)
Regardless of what the facts & figures say, home prices are on the rise right now and many people are getting priced out of the market. Don’t let this happen to you – TAKE ADVANTAGE of interest rates and consider picking up an investment or upsizing to build a strong portfolio and long term wealth! Tweet Angie today @angieweeks or text or call 949-338-7408.
Read Full Post | Make a Comment ( None so far )Experienced Developer Seeking Investors for Immediate Opportunity
Orlando Lutheran Towers, located in Orlando FL is just one of many projects completed by this developer.
Attention Investors:
We’re working with an experienced developer of over 30 years on multiple projects. He’s originally from the east coast, and is expanding his successful ideas west. He’s seeking investors here, and asked us to reach out to our sphere! You can meet him in person to ask questions & find our more details on Oct 20th, 2015, 1-2pm at our office in Corona del Mar.
If you’d like to partner on investment property, read on for specifics.. maybe this equity partner opportunity is for you.
Preliminary Equity Partner Participation:
- Separate LLC’s will be formed to procure entitlements;
- This entitlement process will be undertaken by our developer who has completed over 20 similar projects. Expected turnaround is 3 – 9 months depending on local circumstances and planning requirements. Note: We have independent specialist contractors lined up to perform these services and obtain final approvals.
- Equity Partners will receive an Annual Return of 18 % secured by a promissory note.
- Equity Partners will be repaid in full at construction loan take-down
- Final Project Equity Entitlements (Equity Kicker) will be 5%
Development Details:
- Types of Projects which we are developing are:
- senior independent living
- senior assisted living
- memory care and congregate housing; each project managed by experienced successful licensed care provider to run the operations. See Items 8-10.
- Locations: Central to Southern California; we have pre-selected two locations: San Clemente and Mission Hills (Palm Dessert); with a potential #3 is in Santa Barbara.
- Project size: 150- 300 revenue Units
- Costs to build and furnish (excluding land) 25-30 million;
When turn-keyed and 70% occupied value multiplier is estimated to be 1.2 : For example: when our project million completed and occupied at 30,000,000 = 30m X 1.2 yields project value of $ 36 m to be purchased by REIT/ or other cash buyers within 1 year or less. (Some projects may be held longer if investors choose) - Three Money Sources will underwrite these loan guarantee programs after equity partnerships are formed.
- Project’s ROI: 20- 25 % annually
- All projects are Green (electricity, materials, smart utilities) and create up to 30% Investment tax credits and sheltered ongoing income which a portion will be available to the equity investors.
- Each project’s care operations will be contracted to a premier California Licensed Care Provider (LCP)
- Our private company, Banyan Care Group Inc (as the 20% GP with our 80% Limited Partners) will develop & provide the AAA facility for the LCP to run.
- The LCP contractually will provide resident management & services, controlled operating costs, and guaranteed revenues.
St Marks Village, an assisted living community in Florida was also a project of this developer.
Orange County Real Estate Success 