Housing Bill….Housing Debacle?

The Housing Bill passed both houses of congress with flying colors and now it seems that a threatened veto by the president has been reconsidered and he will sign the bill after all. So is the housing bill good or bad for America?

Let’s take a look at some of the finer points in the legislation.

· $7,500 Tax Credit – Yes that’s right, for those of us who buy a foreclosed home as a first time homebuyer, there is a tax credit. But wait, not so fast, the credit has to be paid back….

What, paid back? How is that a credit then? Sounds like Mr. Reed and Ms. Pelosi pulled a fast one. If you take the credit, you’ll have to pay it back in equal installments over the next 15 years.

· Increase in Conforming Loan Limits for Fannie Mae – Under the current system, home loans greater than 417,000 are considered to Jumbo Loans. Under this provision the new conforming limit will be $625,500.

This is good news for those of you were forced to take a Jumbo loan when you bought or refinanced your home in the past. If you have a loan amount between $417,001 and $625,500 it is time to investigate whether a lower rate is available! Call Today!

· FHA Revamped and Modernized – The good news is that FHA will be revamped and modernized and will act as America’s major subprime player in the mortgage market. The bad news is that the bill takes away down payment assistance.

If you are in trouble and on the verge of foreclosure, FHA may be the answer. Refinancing with an FHA loan is exactly what this new program is for.

However, if you are one of the more than 250,000 citizens each year that depend on down payment assistance in conjunction with an FHA loan, the Democrat controlled congress (you know, the ones who are ‘for’ the little people) just kicked you to the curb.

And, if you are a real estate investor, this means that your flip strategies with homes in the first time homebuyer market may be at risk. There are resources available to help you sell your homes using down payment assistance but they will now be very specialized sources and may require buyers to take certain home ownership courses to qualify. (for information on these sources visit dividendamerica.com and schedule a consultation)

The bill is a mix of good and bad, give and take. To be fair, this bill is more about giving stock market investors confidence in the mortgage market than about helping the everyday citizen.

As with all things government does, this legislation is a huge compromise that could have been better but is a step in the right direction.

For more information read the article on MarketWatch.com: http://www.marketwatch.com/news/story/fine-print-housing-bill-mutes/story.aspx?guid=8AA21F55-D848-4076-B9EF-282FEAD95B1D&print=true&dist=printMidSection

Michael Gross is the President of Dividend America Mortgage and has been in real estate for over 20 years. He has been a builder, a Realtor, an appraiser, and currently he is a lender and an active real estate investor. He uses all of his experience and knowledge to show individuals how to properly use a mortgage as a tool to help create greater wealth through real estate investing. For more information on residential and small commercial loans please contact Mr. Gross on his direct line at 770-350-7373 or via email at mgross@dividendamerica.com

The Value of Time

Many people are worried about their home values. A recent study shows that home values dropped by 1.7% last month in 43 states. That’s the largest drop in recorded history. So what can you do?

First, don’t panic! Remember that real estate is an illiquid asset. In most cases non-liquid markets tend to stabilize faster than liquid markets. After all, you can make a run on a bank and you can dump a stock, but selling a home is a more drawn out process.

In historical terms, real estate has always been a long-term investment. In the final analysis, the home is much more than an investment; it is also a place of refuge, comfort and security for your family. If you are in a neighborhood with good employment, strong schools and low crime, time will heal the financial wounds inflicted on your home value by this economic downturn.

The value of real estate and the ‘investment’ aspect are a product of time. Most people achieve wealth in a primary residence from two forces that create equity and value. Over many years the market will incrementally increase the value of the home and the owner can pay off the loan on the property. This one-two combo punches up the equity in the home and creates a financial windfall for the owner in the distant future.

Homes that are located in good neighborhoods with positive histories benefit from patience and will be the first to retrieve lost value once the market perceives that the economy is okay again.

Focus on reducing the principal balance on your mortgage and on maintaining the quality of the property and the appearance of the neighborhood as a whole. Banding together with other concerned homeowners to maintain the integrity of the entire neighborhood will insure future value growth.

Patience and persistence are important. In this market the key to the return of your home’s value is time.

If you have specific questions or concerns about your homes value, the interest rate on your mortgage or the impact of an economic downturn on your market, please do not hesitate to call. We are here to help.

Summer Time and The Livin’ is Easy!

Okay, so you job is on shaky ground, you can’t afford to put gas in your car to take a vacation and the kids are driving you crazy! You know what that means?

It’s project time. What?!? That’s right, it’s project time. Summer projects are a great way to bring the family together and keep everyone focused. Why not get back to basics with a family project that will make everyone feel great when it’s done.

I remember growing up when there were summers we could not take a vacation. In those years we had projects. One year we put in an above ground pool and another we built a vegetable garden.

The vegetable garden was the project I remember the most. To this day every home I’ve lived in I’ve found a way to build my own garden. It’s hard work in the concrete like Georgia red clay, but the end results are worth it!

Don’t let the summer heat and all the bad news that the media spews get you down. Choose to accomplish something with your family. I guarantee the memories will last a lifetime and the lessons of hard work and togetherness will be invaluable.

Resources:

For a Summer Garden visit Walter Reeves web site! (He’s Georgia’s Gardner)
http://www.walterreeves.com/

Home Remodeling Projects:
Interior Painting:
http://www.behr.com/behrx/inspiration/artistic_2.jsp
Exterior Painting: http://www.lowes.com/lowes/lkn?action=howTo&p=Improve/Ext_paint_tips.html
Decks & Patios:
http://www.deckandpatio.com/

Have fun! Send us pictures of your project and we’ll post them with our next newsletter……and remember……if you need to refinance to pull a little cash out of your equity to complete a summer project, Dividend America is there with the loan that is right for you!

LISTEN UP! The Rules Have Changed

As an investor, your financial future depends on your ability to get financed. The rules have been changing for months now and conventional and hard money financing have hit rock bottom.

The noose around the neck of the real estate community is meant to strangle you, the investor. If you’re not strong enough and knowledgeable enough, you will not make it. So what can you do?

Two things! First, get educated. Knowledge is power and education is the key to wielding that power to create a dynamic, profitable and cash flowing real estate business.

Many say the days of the quick-turn strategy are gone for good. I have been preaching this mantra for many months now. But something has happened. There has been a change in one portion of the market.

With the proper plan and the right team, you can begin to purchase, rehab and sell properties and then use the cash to build an income generating machine. Buy and sell can stage a comeback in this market, if the proper strategy is employed!

There are some rules that must be followed for this strategy to work. First, you must have a solid team of knowledgeable professionals working together to achieve success. Second these professionals must be trustworthy and proven.

If you can put together this type of team, you will be able to find the funding you need to pull this strategy off! Or you can go to a professional that already has put the team in place!

I have been quietly investigating, becoming educated and putting a team of professionals in place for the past month. Now it’s time to roll it out.

For a limited time, I will be offering sessions educating investors on this strategy. I’m looking for 20 people that want to learn and grow in this tough environment. If you are ready to learn how you can build a business that creates quick-turn opportunities and long-term cash flow without having to worry about ‘take-out’ financing, give me a call.

Remember, I can only mentor 20 people. If you think you have the drive and the ability to learn and follow a plan, then email me or call me ASAP.