Transactional Funding vs. Hard Money Lending


Ask the Pig





Check out the above video for my answer to J. Paul’s question, “What’s the difference between transactional funding and hard money lending?”  They are completely different forms of financing a property, and so it’s important to know the difference between the two, and which deals would require which type of funding.  So, check out the video above and then feel free to leave us your comments below!

Not a subscriber yet?  CLICK HERE to join our e-mail list, and grab 2 free resources in the process, “Guerrilla Marketing for Real Estate Investors” and “Top 10 Foreclosure Mistakes and How to Avoid Them!”

Read More

Sell Faster By Providing A Home Warranty


Home-Warranty- 1With the national housing market showing signs of improved strength and stability, and inventory levels on the rise, sellers no longer have the advantage that they regained in 2012 after the Great Recession’s prolonged buyers-market. With buyers and sellers on a more even playing field, investors who renovate homes to resell need a competitive advantage in the market to ensure a quicker sale.  In my recent post, “7 Keys to Selling Your Fix & Flip in 7 Days”, I listed seven things that I do on each and every investment that helps me consistently sell my renovation properties in less than a week.  If there had been a number 8 on that list, or if I had an honorable mention, it would have been providing a home warranty.

Home warranties cover repairs on most of the major mechanical aspects of the home, including duct work, plumbing, electrical, appliances, roofing, and HVAC systems, just to name a few. Today’s buyers are looking for confidence in any purchase that they make, especially when that purchase includes the largest asset that they have ever owned.  As an investor, if you include a home warranty for your renovation project, you provide the highly desirable “peace of mind” that many buyers need, especially those purchasing a home for the 1st time.  When buyers know going in that they can avoid expensive service and repair bills that could disrupt their budgets, they are much more likely to choose your home over the competition.

Research studies from professionals in the housing industry have determined that when your property is covered by a home warranty protection plan it will sell faster (11 days quicker than your competition) and for more money ($2,300 more on average) than homes that don’t offer this Home warranty 2incentive for a potential buyer. Having a home warranty in place will establish your property as a preferred home, and can be the catalyst for attracting more first-time buyers, and helping you avoid closing delays caused by equipment failure in the home.  As an investor, you can also have your own peace of mind after the closing, since your buyer will most likely be contacting the home warranty coverage provider with repair issues, and not you.

In summary, to make your investments more attractive to consumers in a highly competitive market, you should use every tool available to make your property stand out above all the others in the marketplace. My “7 Keys to Selling Your Rehab in Less than 7 Days” is a MUST READ for any rehabbers (or home sellers) out there, but I neglected to include this very important “8th Key”, and that’s offering a home warranty to potential buyers.  It’s an excellent strategy for making more money and getting a faster return on your investment.

Now, let me know your thoughts. Have you offered home warranties in the past, or do you plan on offering them in the future?  Did you consider it a good investment?  Share your comments below, and let’s learn together…

Read More

Fannie Mae: Gradual Housing Recovery Will Continue Into 2015


house_for_sale_sign_hg_clrImprovements in the labor market in 2014 have not translated to rapid housing market recovery this year, according to the Fannie Mae August 2014 National Housing Survey. Instead, data in the survey indicated that recovery for the housing market will be slow heading into 2015.

The number of people surveyed who said they believe now is a good time to sell a home fell six percentage points to 64 percent, an all-time low since the monthly survey began in June 2010. The number of people who said now is a good time to buy a home also declined to 38 percent.

“The August National Housing Survey results lend support to our forecast that 2015 will likely not be a breakout year for housing,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The deterioration in consumer attitudes about the current home buying environment reflects a shift away from record home purchase affordability without enough momentum in consumer personal financial sentiment to compensate for it.”

The number of respondents surveyed who believe home prices will increase in the next 12 months stayed at 42 percent from July to August, while the percentage of respondents who say they think home prices will go down in the next year increased to 9 percent while the share of those who thought and mortgage rates will go up in the next 12 months fell to 50 percent. The average 12-month home price expectation also took a slight dip from July to August, to 2.1 percent.consumer_confidence

The percentage of survey respondents who said they would buy a home if they moved dropped to 64 percent while they number who said they would rent if they moved jumped up to 32 percent. The 32 percent gap between the two is the smallest in more than a year.

As far as attitudes toward the economy, the number of people surveyed who believe the economy is on the wrong track dropped down to 56 percent from July to August. The number of respondents who believe their financial situation will get better in the next 12 months went up to 44 percent, but the percentage who say their household income is significantly higher than it was at this time last year dropped from 28 to 23 percent from July to August.

“To date, this year’s labor market strength has not translated into sufficient income gains to inspire confidence among consumers to purchase a home, even in the current favorable interest rate environment,” Duncan said. “Our third quarter Mortgage Lender Sentiment Survey results, to be released later this month, are expected to show whether mortgage demand from the lender perspective is in line with consumer housing sentiment.”

Fannie Mae representatives polled 1,000 Americans live via telephone for the results in the August 2014 National Housing Survey.

Posted By Brian Honea Article printed from DSNews

Read More

Do-It-Yourself Landscaping – Seven Steps to Sexier Sidewalks


OLYMPUS DIGITAL CAMERAMost investors know that one of the most important aspects of selling a home is curb appeal, and yet many of us are lost on exactly what that entails.  Of course a nice mailbox, painted front door, and a freshly mowed yard fits the bill, but today’s buyers expect much more when they purchase a new home. For the last few years, my good friend Paul Mattutat from Avalon Landscaping has been in charge of giving my renovation projects some extra “wow” factor in the form of landscape design. I recently asked him to share with the Professional Investors Guild, (especially those weekend warrior rehabbers out there) some of his professional landscaping tips.  He came up with these 7 ideas to help give your renovation project some front-yard sparkle:

STEP #1 – Come up with a Landscaping Plan: You know the old saying, “If you fail to plan, you plan to fail” and the same is true about landscaping.  You have to assess the situation and make some decisions about how to proceed.  Is the current landscaping salvageable or should you completely start over? Is it enough to simply pull the weeds and prune the shrubs, or has the landscaping been neglected long enough that it’s time to start from scratch?  The simple truth is that the cost of new plants is relatively inexpensive, so the better option is usually to start anew.

STEP #2 – Landscape DEMO: If the landscaping is salvageable it’s time to pull the weeds, and prune the shrubs. If you’re starting over, you’ll want to dig up all plants, weeds, and anything else that doesn’t add to the cosmetic value of the new plan. Measure the distance along the house for approximately how wide you want the new bed.  (***Somewhere between six to eight feet is usually a good rule of thumb***). If you have a small front yard, you’ll want to decrease the width proportionately, so the bed doesn’t take up too much of the available space. You’ll also want to know how long the house is, so you can have the right amount of plants to fully cover the landscape area.

STEP #3 – Time to Go Shopping: After you know how long the house is, it’s time to go to the nursery and purchase your new plants. When selecting plants for your landscape project, you want to increase the plant height as you move from the front door to the far corner of the home. I usually use small colorful grass (Flax Lilly) by the front door, foundation shrubs (Azaleas, Holly, etc.) along the house and a small tree (Crepe greenhouse-plantsMyrtle or “Little Gem” Magnolia) on the far corner as a focal point. The grasses by the front door should take up 5 to 6 feet along the house, and the focal point on the corner of the home should be approximately 8 feet from the corner to the front door. The distance in between that is used for what we call foundation shrubs.  While at the nursery, make sure you ask how big the shrubs will get when they are mature.  Just because the nursery has it in a small pot, doesn’t mean it will always stay small…which could mean a jungle in your front yard in a few short months if you’re not careful.

BONUS *** Landscaping Golden Rule***: Always purchase an odd number of plants for your project, so they can be staggered in two rows along the house. This absorbs the bare space better and gives the bed a greater deal of character. A straight row along the house usually looks boring and plain, which is the last thing we want when trying to “wow” potential buyers.

STEP #4 – Lay the plants out BEFORE planting:  It’s always a good idea to lay everything out on the ground before you start digging holes and planting.  As you lay out your new plants, make sure you keep an equal amount of space between each plant type, with around 8 to 12 inches between colorful grasses, 3 to 4 feet between foundation shrubs, and as mentioned before…your focal point should be about 6 to 8 feet away from the house, foundation shrubs, and the edge of the bed line. Once you are happy with the spacing and overall look, now its time to plant! When digging the holes, you want to make them approximately 4 to 6 inches wider then the root ball, but around the same depth. There should be enough room to pack the dirt around the root ball with your hands and the top of the root ball should be level with the ground. *** IMPORTANT – Don’t pack dirt on top of the root ball! This will suffocate the plant and kill it, ruining your master plan, and costing you a bunch of money!

STEP #5 – Preliminary Clean up: After the plants are installed, or the existing shrubs are pruned, it is time for the major clean up. Rake up the debris (sticks, leaves, roots, etc) from the grass along the edge of the bed and from inside the bed. Clean up all the dirt and debris on the front porch, walkway and driveway…and use a blower to get the last little bit of dirt of these areas.

mulchSTEP #6 – Install mulch or pine straw: Starting from the edge of the house and working your way to the end of the bed, you’ll want to install some decorative mulch or pine straw.  By starting near the house, it keeps dirt on the bottom of your shoes from getting on your mulch and prevents footprints from ruining your fresh new look. Install mulch all the way up to the trunk of your plants and all over the ground. There shouldn’t be any bare spots of dirt showing, so make sure you purchase plenty of mulch for a sufficient cover. It’s ok to cover the top of the root ball with mulch (but not dirt!), but keep it thin to prevent suffocation. After your mulch is installed, take the bottom of your shovel and tuck the mulch along the edge of the sidewalk and along the base of the house. This gives it and nice finished look, and makes sure that none of the mulch is spilling onto the sidewalk. Success is all in the “details” and this is one of those final touches that can make a big difference.

STEP #7 – Final Clean Up: This should be the easiest part of the job and consists simply of blowing off the bits of mulch that got on the sidewalk and knocking off the pieces that got onto the plants.   Don’t ruin a great new landscape design project by being sloppy, and leaving it a mess.

OK, now you’re done…and it’s time to celebrate! Step back and smile at what a great job you just did!  Then be sure and take a selfie with your new landscape project, and share it on the PIG Facebook page!

Read More

Freddie Mac Reports Little Movement in Mortgage Rates


Freddie MacHaving hit their lowest level of 2014 last week, mortgage rates barely budged in the latest market report from Freddie Mac.

The company reported Thursday the average interest rate for a 30-year fixed-rate mortgage (FRM) was 4.10 percent (0.5 point) for the week ending August 28, unchanged heading into the Labor Day holiday.

A year ago, the average 30-year FRM was close to half a percentage point higher at 4.51 percent.

The 15-year FRM was up just slightly, climbing to 3.25 percent (0.6 point) from the last survey’s average of 3.23 percent.

Adjustable rates also moved little, Freddie Mac reported. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.97 percent (0.5 point) for the week, up from 2.95 percent in the previous survey. The 1-year ARM averaged 2.39 percent (0.5 point), up barely from 2.38 percent before.

Frank Nothaft, VP and chief economist at Freddie Mac, explained the week’s movements—or lack of them—were in response to mixed news in the housing market.home sales

“Existing home sales rose for the fourth consecutive month to an annualized pace of 5.15 million, the highest of the year. On the other hand, new home sales fell for the third consecutive month to an annualized rate of 412,000 units,” Nothaft said.

He continued: “Also, the S&P/Case-Shiller national home price index confirmed the slowing in national house-price appreciation that has occurred in other metrics, with the seasonally-adjusted national index down 0.1 percent in June but on a year-over-year basis up a solid 6.2 percent.”’s weekly national survey was more mixed, though changes were still minor.

According to a release from the site, the 30-year fixed average this week came down 1 basis point to 4.23 percent, while the 15-year fixed moved up a point to 3.38 percent.

The 5/1 ARM average was a little more active, coming up to 3.32 percent from 3.28 percent last week.

Janet YellenContrary to Nothaft’s analysis, analysts at Bankrate say the big catalyst for rate changes this week was Janet Yellen’s speech at Jackson Hole last Friday, in which the Federal Reserve chair continued to hit on unemployment as a major cause of concern, leading commentators to believe she’s not yet ready to raise interest rates.

“With Yellen not making any unexpected pronouncements, financial markets carried on as usual with the stock market going on to set new record highs and the bond market motoring along,” Bankrate said. “No obvious catalyst for big rate movements exists between now and the release of the August employment report on September 5.”

Posted By Tory Barringer Article printed from DSNews

Read More