Is the Housing Double Dip Already Here?

While most headlines tout the growing strength of the housing sector, we take a look at recent numbers which paint a different picture. Real Estate is local. We’re looking specifically at production homes built in the last 14 years in West Phoenix. The hotbed for investment activity over the last 3 years.   To be sure, there is value in the market; you just have to look for it. And look. And look. And then, maybe you find something. Prices, without question are up, and rightly so…with interest rates at fresh historic lows seemingly every week, the cost to own is cheaper than the cost to rent. So there is real pressure to drive housing prices higher……. Up is the current direction of the market, or is it?   Whats going on with Inventory? Bank REOs have responded and listed their prices according to the market, or what they think is the market. Guess what? Their not moving at those prices.  At least not like they were in the first half of the year. Bank REO inventory for this segment is up 53% over the last 3 months. Short Sale buyers are now sellers. Look around, any short sale buyer with even a small appetite for a dollar [and who couldn’t use an extra $20,000 in today’s economy?] is back on the market with a new price 20-30% higher than their purchase last month. Where have I seen this before? Traditional owners sniffing a recovery are dipping their toe in the market, hoping to get out of their home. All this points to rising inventory.   In the last...

Hard Money Loan FAQ’s

What is a hard money loan? A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued by private investors or companies. Interest rates are typically higher than conventional commercial or residential property loans because of the higher risk taken by the lender. Most hard money loans are used for projects lasting from a few months to a few years.   How does a hard money loan work? Traditional bank loans are dependent on many factors, including the borrower’s income, credit, tax returns, etc. They require minimum credit scores, and can take months to close. A hard money loan relies solely on existing hard assets (real estate). There are no credit score requirements and loan decisions happen much more quickly. Though higher risk means a higher interest rate, hard money loans can be highly beneficial for many investment opportunities.   Who qualifies for hard money loans? How do you qualify for a hard money loan? Truth be told, you don’t. The property is or should be 99% of the underwriting criteria. Investors lend on property that has plenty of a protective equity left after funding the loan.    Where does the money come from? As the name implies, the funds come from private investors who are looking to make hard money loans.  The source could range from one individual hard money investor to a group of private investors who each fractionally invest in your hard money real estate loan, or a group of private investors who have already pooled their funds and rely on a professional commercial lending asset manager...