The Short Sale Phenomenon

Short sales have often been mentioned as a way of getting a really good deal in the current climate, even better than those on offer due to foreclosures.

What defines a Short Sale?
Basically a short sale is where the homeowner cannot afford to make any more mortgage payments, which means they have defaulted on their mortgage. Only once this happens will the lender consider a short sale.

So when a short sale occurs, the lender is prepared to accept an amount for the house which is less than the existing mortgage, hence the “short” element of the sale.

To get a lender to accept a short offer will depend on many factors such as how much you can put down, how much you are borrowing, how quickly you can close and if you will be able to get a mortgage.

Short Sales via Experience
It is vitally important that you work with an agent that has experience of short sales, and knows which houses are on offer for short sale. Many short sales will not be on offer to the public, so you need to know that your partner has connections so you can snap up these bargains.

Who Qualifies for a Short Sale?
It’s not as easy as just asking your lender for a short sale if you cannot pay the mortgage. You have to provide other proof such as a hardship letter, bank statement and other information; many sellers will need to be convinced that you cannot afford to make payments before they agree to a short sale.

How long does it All Take?
A short sale will take much longer than a traditional a sale, sometimes as much as 6 months, so even if the seller has accepted the offer, nothing can be done until the lender accepts.

Choices – Short Sale or Foreclosure?
If possible, it’s best to go for a short sale as this will have less impact on your credit rating than a foreclosure. It is imperative you work with professional and trustworthy people when considering your options between short sale and foreclosure.

USA Property Investor | Driving Force in the Rejuvenation of Detroit

Latest press release on USA Property Investor & the Detroit housing market

UPI creates unique investment opportunities to ensure Detroit renters and families get access to quality homes following the recession

After being hit hard in the recession, Detroit has begun to find its feet again in a big way. This improved economic outlook means serious investment potential for savvy investors. UPI is leading the way in this, applying their investment knowledge to bring together families who have lost everything with those able to help them reclaim home life.

In Detroit, the recession struck particularly hard and escalating unemployment along with business closure has meant that many people who lost their jobs were simply unable to find another. The severity of the recession has left an unprecedented number of people finding themselves without the security of a job and a roof over their head.

As things begin to turn a corner, however, what was looking like a dire situation is now one that is offering a great deal of opportunity for those who want to purchase a property in Detroit at this time. Both investors and those now back in employment can look forward to a brighter future as people return to steady jobs and begin looking for somewhere to live and settle with their family.

UPI is an organisation assisting investors able to purchase and restore properties in this region, helping people to secure much needed homes in the area. In a region where there is a shortage in excess of 30,000 rental properties, UPI is now providing a much needed service.

This real estate organisation is providing a service for investors by taking over the sourcing of quality properties. Those who invest with UPI, can finance the property deals and are able to gain returns without having to take responsibility for the restoration and management of the rental property.

This is a win-win situation in which there is a net increase in the number of rental homes, providing much needed accommodation; plus investors can feel confident that they have secured in-demand, rental property in a location which has strong projections for future appreciation in property values.

In the current climate there is an overwhelming demand for property that is not being met. That means right now is the ideal time for investors to get involved. Putting money into rejuvenating properties will give the city a boost, and there is no doubt that this will in turn bring in positive cash flow for those investors who grab hold of this opportunity at this time.

When discussing how this investment system would play a part in rejuvenating Detroit, UPI owner Ollie Booth described what the boom in Detroit property means at this time. ‘Right now the city is changing and this means really great opportunities for investors who are ready to take advantage of that outstanding opportunity’.

“ReFresh” Detroit Success Has Bearing On Real Estate Market

When once there were automobiles, now there are businesses. Two weeks ago Detroit’s Mayoral Office announced it had selected five new neighborhood commercial corridors in the district as part of its on-going drive to encourage re-investment in the city.

Since the projects inception just over a year ago, the Office of Neighborhood Commercial Revitalization has overseen the birth of 211 new businesses, 700 new jobs, and delivered technical assistance, and start-up loans to a total of 2,000 firms seeking advice on business growth, and expansion. As a direct result of the ONCR influence, over $100 million of private investment has been pumped into the Detroit economy.

It’s good news for Detroit, and possibly the catalyst for a surge in domestic property investment as now has never been a better time to acquire a foothold in the market. Prices have been rising steadily since the turn of the year, and Ollie Booth of USA Property Investor (UPI) is quick to point out that those prices will keep on rising now in light of the recent upturn in fortunes for Detroit’s business community:

“While it’s good news for the city’s businesses, it won’t be good news for those looking to get a foot on the property ladder,” Ollie says earnestly. “Prices have continued to climb in the housing market, and really now is the best time for all those looking to invest in single homes for families, or multi units of two, three, or four apartments, or even commercial properties.”

And that’s where real estate firms such as UPI come in, bringing all their experience and know-how to make such investments easy, and stress-free. Detroit has been hot for a while, and UPI has been busy spreading the word that Detroit has been the place to make serious financial stakes for some time.

“Our aim,” says Ollie, “is to recycle low cost housing, turning foreclosed and uninhabitable houses in Detroit into refurbished, clean, safe homes for low income and often homeless families. These families are homeless, in many instances due to landlord foreclosures.

We provide a much-required service to a region struggling with a shortage of 30,000 rental homes. We are offering all our investors the benefit of a ‘hands free’ or ‘armchair’ investment. In return our investors will receive solid, passive income every month and a property that is poised to appreciate in value in the coming years. We refurbish all our investors’ properties at outset, within one all encompassing cost.
Our investors receive excellent yields with the additional benefit of knowing that they are helping to solve a housing crisis, assisting low income families in US, often not as fortunate as themselves, with the security of the Section 8 HCV Program backed by the US Government. This ensures that your rents are paid on time every month with no exceptions.”

So with the Mayor of Detroit giving the city ‘Refresh’, perhaps, says Ollie, it is time for private investors to Refresh their stakes in the city too.

Property Investment Checklist – Part 2

Continuing on from yesterday’s post, here is part 2 of our property investment checklist.

Condition of the Property
This sounds obvious, but believe it or not is often overlooked.

A few years ago an investor from the UK went to New York to invest. He was bullish in his approach and he asked realtors (see above re. Realtors) to find all properties under x value and he bought them all.

Low and behold he then found that all of his properties needed extensive repair (he was buying through Realtors remember!) In the US, local government can mandate that a property has to be maintained in a good state and must not be perceived as being a hazard or ‘unsightly’.

If the owner fails to bring the property up to ‘code’, the state authority has powers of enforcement. In this instance, the investor could not afford to do the repairs mandated by the property code. Consequently his properties were seized and a warrant put out for his arrest. He left the US empty-handed!

It is imperative you have a trusted Property Management company to manage your investment from the outset. We at USA Property Investments make sure all purchases are run through our property managers.

Section 8
‘Section 8’ is the UK equivalent of housing benefits. This means that the tenant has a portion of their rent paid by the state based on their financial circumstances. Buying property that is ‘section 8 approved’ with or without a tenant is a good sign that the property is up to ‘code.’

Every few year an assessment is made on the property and a section 8 is extended providing it is in good working order and meets the criteria as set out by the state. If you’re buying a property that is section 8 approved make sure it is up to code. In the event that it isn’t then at the next annual assessment, benefits to the tenant will be held until the property is brought up to code and your rent will go unpaid.

Rental Profits
Like all out of town investors, you will be using a trusted Property Manager to manage your property day to day. Your agent will collect the rents and pay you your rental profits. A UK-US dual tax treaty makes this financially advantageous for us.

However, you must obtain an ITIN (International Tax ID) number before you can receive rental profits. Your Property Manager has a duty to hold onto all rental profits until this is in place. Make sure you apply for this as soon as you can.

Getting an ITIN
1. First off you will need a foreign notary to certify your passport (you can use any notary in your home town);
2. Once received, this will be sent to the Hague for approval.
3. Once approval is received from the Hague, you can apply for an ITIN. The whole process takes approximately 8 weeks.

Avoid these pitfalls and it’ll make your investment run smooth as silk. Just remember, use a good property finder to source your investments; we at USA Property Investors already work with good, reliable property finders and will take the risk out of your investment.

Property Investment Checklist – Part 1

Here is a checklist of things to consider when making an assessment of what makes a good investment. These are the things I’ve seen a lot of investors fall foul of and with a little care and attention, you can avoid these pitfalls.

Water Bills
The law in New York State mandates that the landlord is responsible for paying the water bills, regardless of who is living in the property. The authorities can repossess the property if the water bills remain unpaid, so definitely do not rely on the tenant to make this payment.

The best thing to do is to factor the extra cost of the water bills into your rent and just pay it yourself – no exceptions, its not worth the hassle or worry.

City Taxes
City taxes are similar to UK council taxes, and are used to pay for emergency services such as rubbish removal, upkeep of amenities etc etc. Each property has a semi-regular assessment which indicates what the property is worth and what taxes are applicable; quite often, this assessment is totally incorrect.

You see, if you want low taxes then you want it to be assessed low, but if you’re selling you want it assessed high. Be careful, use good property finders (not Realtors!) who know the true market values and whether it’s been assessed in your favour.

Realtors (Estate Agents)
Having had plenty of dealings in the US, the same comment I always get is that ‘Realtors would scratch your eyes out to make a sale.’

But we need to be clear on the point here; the Realtor has a duty to the seller so for them, every property is a good property regardless of its condition or location.

If you’re looking for investment properties, you need to use a professional property finder to source your properties. These guys know where to invest, and more importantly where to avoid. Only a property investor knows the true mechanics of what makes a good investment and what doesn’t.

Tomorrow we’ll cover part 2 of the checklist.