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Useful Investment and Real Estate Apps & Websites

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The internet has spawned several helpful apps for anyone involved in the real estate world.  I found some to be especially helpful, both in locating and in evaluating possible investment properties.  Below are some of the more notable ones:

  1. Bigger Pockets

This app contains searchable forums where most every question that you can think of has been answered regarding real estate investing.  It is also a great place to meet other investors in your area.

  1. Zillow; Realtor.com; Trulia; Redfin

Zillow, Realtor.com, Trulia and Redfin are great sources to see what properties are for sale or sold in a particular geographical area so that you can better determine the value of a potential investment.

  1. Hammer Point

With this app you can estimate the entire cost of your remodel or repair before  spending your first dime.  A very valuable tool which will help you with the various aspects of your project.

  1. Homesnap

This is an invaluable tool.  With this app you can take a picture of a property and it will give you the address, estimated value, local demographics and more.  Simply take a picture and drive on.   All the details are in your phone for later download.

I hope these resources will prove helpful in better time management and productivity as you pursue your investment goals for 2017.

Why Invest in Real Estate?

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The fallout from the recession left some investors less likely to look to the real estate sector as an option for wealth growth.  However, we have witnessed a radical change in the economy and as a result, real estate has once again regained its rightful place as a solid investment in today’s financial world.

Unlike stocks and bonds, real estate is founded on brick and mortar.  A major advantage of real estate investments is the significant portion of return, which accrues either from rental income or appreciation over the long term.

Additionally, investing in real estate has a lower risk factor than other major asset classes.  This allows the investor to lower his/her portfolio volatility.  Financial consultants always advise diversification for their clients.

We have seen that as the economy has grown, the demand for real estate has driven the rents higher and higher, allowing for unprecedented growth in individual capital.

Of course, one of the major drawbacks of real estate investing is the lack of liquidity.  While you might be able to cash in stock overnight for immediate funds,  a real estate transaction can take months even with a competent agent.   Overall, as long as you have built flexibility into your portfolio,  you can be comfortable with some portion of it being illiquid, but producing capital appreciation.

For the past 29 years Sun Pacific Mortgage and Real Estate has provided many investors with the opportunity to invest in Notes.  We regularly have trust deeds available, for property investments throughout California.

If interested in earning 9-12% return, we look forward to working with you.   Please call 707-523-2099 for information on becoming an investor through us.

The Latest Trend for Pension Funds: Private Equity Investment

Recently it has become increasingly clear that private equity is an attractive option for pension funds. Because the ultimate question in any investment decision, big or small, is the return on money, Investors are turning to private equity funds to bolster their portfolios.

The more time, the more money.

After the lean years that followed the 2008-2009 financial crises, the performance of private equity funds has started to outpace the market.  Contributing to the interest in this type of investment is the volatility of other public and private markets.  Private equity is not subject to the same daily volatility of other investment options, such as the stock market, from emotional reactions and headlines.

When you consider the investment goals of the typical pension fund investor, long-term capital appreciation is at the top of the list.  You won’t find the fluctuations of the bond and equity markets in private investments, making this option a far better place to entrust your funds.  The private equity industry has matured and become more diverse in recent years making it a viable option for Investors looking to grow their finances.

My family owned and operated Hard Money Company has been in business since 1988.  If you have any interest in investing in California trust deeds, then call our office at 707-523-2099 as we regularly have these available.

 

Hate Turning a Borrower Down?

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We get loans brokered or referred to us by mortgage professionals who had to tell the borrower “no” for whatever reason. Most that call us need quick action and approval – because they are running out of time. You actually do want to help – and have had underwriting fail you.

Sun Pacific Mortgage is uniquely qualified in that our underwriting is based on 2 things – loan to value and ability to repay. Even our “ability to repay” is far more flexible than conventional underwriting.

We loan up to 75% of the value of the property and in some instances as high as 80%. We do Jumbo Loans commonly

Call us today at (707) 523-2099.

Fractionalized Loan Investing

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Funding Large Loans…

I wanted to report nothing but good news here at Sun Pacific Mortgage. Last month was another record production month. We are funding an ever increasing number of loans and larger and larger loans.

To get some of the larger loans done we have had to “fractionalize” the loan. This is the formal term we use that describes having more than one investor contribute funds to get the loan done. As an example: $750,000 loan amount and 2 investors each invest $350,000. Another example: Same loan amount of $750,000, but Investor 1 funds $300,000, Investor 2 funds $200,000, Investor 3 funds $200,000 and the final Investor funds $50,000. This is a very common investment tool.

Here are some of the pros and cons of “fractionalization” from the Investors viewpoint.

Pros first: These are just a few of the reasons to do a “fractionalized” loan. 

  1. This allows you to have a share in a very good loan spreading the risk to a number of investors.
  2. It allows you to get your money out there rather than waiting for a loan that fits your available funds.
  3. You don’t have to have all your eggs in one basket. Rather than doing just 1 loan you spread your investment dollars around on a number of smaller investments.

Cons:

  1. All investors need to agree on a course of action if the loan gets into trouble. This is only real con I could come up with. I must point out that this has not been an issue in the past 5 or 6 years as we have not had a residential foreclosure in that time, that I am aware of. The decision that matters is to foreclose or not foreclose. It’s usually pretty obvious.

Fractionalization can be an amount from $100,000 to $1,000,000. Hopefully this description of “fractionalization” can expand the opportunities for you as the Investor.

Owner Occupied Principal Residence – Part 2 of 2

pic1 This is Part 2 of Owner Occupied Loans. In this writing I will feature several of the legal aspects of this all-important Program.
If you missed reading Part 1, click here!

The purpose of this article is to encourage investors to continue to make these loans, in spite of the rumors that exist surrounding them.

I will start off this article the same as the beginning of Part 1, by saying that I will always offer loans to homeowners that are owner occupants. It is an important segment of lending and a heck of a niche for my office. I will say that the feds have brought about a lot of regulatory protections for this class of Borrower, but that is simply because they have determined home ownership to be such an important right and should be protected. It’s kind of like car seats for kids, seat belts, speed limits, food labels, movie ratings, warning labels on medications, etc., etc.

I will also tell you that there has not been a foreclosure of an owner occupied loan originated by my office (that I am aware of) in the last 6 years. This is key.

There are really just 2 quasi-objectionable regulations that apply to owner occupied transactions.

  1. The loans can be rescinded for up to several years if the correct disclosures were not made at the beginning of the loan. Rescinding a loan means that the Borrower gives back the principal and the investor (and the Broker) give back the interest and the fees. I asked our attorney about the incidence of this and he had no answer. I have never heard of it happening. I have also done tons of research on line on the subject and cannot find case law that applies. That is proof that, while there is lots of regulation, the occurrence of legal problems with these loans must be minimal as I cannot find anything on the subject.
  2. These loans take longer to foreclose upon. As these loans are required to be serviced, this is a servicing question. The regulation requires you wait 120 days to begin the foreclosure process. Then it’s just the regular foreclosure timing. From my experience, most investors would wait this long at least. Add to that the fact that we have not had a residential foreclosure (that I am aware of) in the last 6 years and it really is much ado about nothing.

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So, statistically, owner occupied loans don’t get foreclosed upon in any significant number (zero in my office), Borrowers do not rescind the loans in any significant numbers (I cannot find any mention of it on line), the loan to values are good, they have an ability to repay the loan, they have an exit strategy, they pay the property taxes and insurance monthly, they do a consumer credit counseling class and the properties will likely appreciate in the coming months and years.

So if you hear mention of avoiding these loans, show whomever has said it these articles. These loans are important and a very good investment.

Local & Creative Financing For Real Estate

“I am truly in awe of you your company! Yet again another seemingly seamless (I know you are working hard to make it seamless) process thanks to the systems that you have in place! Always a pleasure!”

“I commend you on another transaction and I will continue to refer you guys as I have on several occasions this past year! Much appreciation to you and your team! All the best, S.M.”

Hard Money Provides …

  • A Quick Close
  • Multiple Options
  • Shorter term loan
  • Makes an impossible deal possible

See some recently funded loans below, to get a better idea of how we can help you, your clients, your family and friends!

Call Us today at (707) 523-2099.

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Best,
Ken and Forest, The Guys in the White Hats

P.S. We love Referrals!

Recently Funded:

Santa Rosa, CA (Sonoma County)

Loan Type: Refinance Owner Occupied 2nd
Amount: $150,000
Days to fund: 23 days
Reason for Hard Money: Debt consolidation

Sonoma, CA (Sonoma County)

Loan Type: Owner Occupied Business Purchase
Amount: $200,000
Days to fund: 9 days!
Reason for Hard Money: Credit was poor

Sebastopol, CA (Sonoma County)

Loan Type: Owner Occupied Purchase Bridge Loan
Amount: $562,000
Days to fund: 10 days!
Reason for Hard Money: Still had foreclosure reported on credit

Windsor, CA (Sonoma County)

Loan Type: Owner Occupied Hybrid – 15 year loan with 3 years interest only and then amortized for 12 years
Amount: $440,000
Days to fund: 15 days
Reason for Hard Money: Difficult to prove income

Mill Valley, CA (Marin County)

Loan Type: Investment Property Refinance
Amount: $240,000
Days to fund: 8 days!
Reason for Hard Money: Property needed fix-up

Elk Grove, CA (Sacramento County)

Loan Type: Owner Occupied Refinance
Amount: $260,000
Days to fund: 20 days
Reason for Hard Money: Low credit scores

Click this link for our rate sheet, showing the programs we offer.

NOTE: Get our financing despite bad credit, difficult to prove income, property a fixer, etc! We finance Jumbo loans, Bridge and short term loans, Owner Occupied purchases and refinances, investment purchases , commercial and land.

CALL TODAY, The Guys In The White Hats at
(707) 523-2099

California Housing Market Headed in Right Direction

In April, California Association of Realtors released their 1st quarter California Housing Market Update citing a number of interesting updates.

C.A.R. President Pat “Ziggy” Zicarelli was quoted as saying:

California’s housing market is moving in the right direction as we enter the spring home-buying season, but sales growth will likely be isolated in areas where inventory is more abundant and housing affordability is less of an issue.”

Taking a look at the the data C.A.R released, it’s interesting to note certain counties with sharp upticks in sales:

County April Median Sold Price March Median Sold Price MTM% Change
Tehama $193,330 $175,000 81.8%
Amador $307,890 $267,860 77.4%
Plumas $231,250 $266,670 75.0%
Tuolumne $239,710 $272,500 71.8%
Napa $666,670 $664,470 70.9%
Merced $189,500 $197,780 70.8%
Santa Barbara $596,770 $729,170 63.8%
Alameda $762,570 $712,990 61.5%
Ventura $620,020 $610,820 61.3%
Yolo $374,000 $387,930 59.6%

 

Of the top 10 counties in California with MTM% changes, we can see a nice spread of housing sold in potential up and coming areas. With Tehama, Amador, Plumas, and Tuolumne Counties all located in Northern California, it would seem affordable housing under $300k is becoming more abundant and selling well. We can  also see  affluent areas like Napa, Santa Barbara, Ventura, and Alameda all maintaining solid home sales in areas with much larger home prices and a steadier inventory.

housemarket

As a Hard Money Broker in Northern California for over 28 years, Sun Pacific Mortgage & Real Estate will always be there if you are looking for creative or alternative financing for real estate, anywhere in California.

We specialize in financing investment home purchases and refinances – single and multiple units. We are very much able to fund or refinance Bridge Loans, many owner occupied or principal residence purchases and some commercial purchases.

Give us a call at (707) 523-2099 if you are considering private financing with your next home purchase!

Owner Occupied Principal Residence – Part 1 of 2

oo 1 This will be the first in a series of articles that will explore the varied types of loans we offer Investors.

Let me start off by saying that I will always do loans to homeowners that are owner occupants. It is an important segment of lending and a heck of a niche for my office. It also has the most regulation by the state and feds who, in their infinite wisdom, have decided that this category of homeowner needs protection. Lots and lots of protection.

I will also tell you that there has not been a foreclosure of an owner occupied loan (that I am aware of) for the last 6 years. This is key.

These are generally very good loans. Most are just shy of getting 30 year fixed rate loans at or under 4% from what we call “A” paper lenders like Wells Fargo, Chase or B of A. Most are turned down due to something in their credit. Second most are turned down due to income. Problem property is the third reason. All the turned down loans that we write have down payments of between 20% and 60%.

Many mortgage brokers have backed off of this type of loan. My guess is they have been run off by the profusion and confusion of regulations. The tragedy is, they have run a lot of investors off of this type of loan. And really, it’s not that tough to know the regulations and comply. Yeah, there has been a lot of regulation, but my viewpoint is that you get your wits around all of it and simply comply with the fed and state mandates and you do these loans. So that’s what I do and that’s why I promote this type of loan.

Almost all of the owner occupied loans that we write have an “exit strategy”. We never used that term before the proliferation of fed and state regulations in response to the recession, but here it is. We write these loans as 15 years loans but I would wager none will go to that term. I looked at the statistics of the owner occupied loans we have written that are serviced and the ones that had paid off lasted an average of 11 months. So we make 15 year loans but they most likely will not last that long. And if they do, hallelujah!

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One thing I must mention that I think increases the security of those loans, is the fact that the feds require they be impounded for the payment of property taxes and insurance. The feds did get that one right. You know every month that those items are paid and not accumulating.

The feds also require that the Borrower on an owner occupied loan demonstrates an “ability to repay” the loan. We don’t even write the loans if they cannot prove they can repay the loan. We turn down quite a few requests, even with a ton of equity, because they cannot prove their income.

Last item to mention is that the feds mandate these Borrowers do a consumer credit counseling class before the loan records. The counselor takes the disclosures for the loan and does a budget talk with the borrower. It’s done over the phone and takes about 45 minutes to an hour. This theoretically makes for a more informed Borrower. Makes sense to me.

informed-borrower

So, statistically, owner occupied loans don’t get foreclosed upon, the loan to values are good, they have an ability to repay the loan, they have an exit strategy, they pay the property taxes and insurance monthly, they do a consumer credit counseling class and the properties will likely appreciate in the coming months and years.

That’s why these loans are a great investment.

To continue reading on to Part 2, click here!

Can Fixing & Flipping Be More Beneficial Or Harmful For You?

We all want to make money… it pays our bills, allows us to buy things we want and helps us more comfortably survive. So of course, when someone sees how “easy” it is to buy and flip a home for profit on TV, they want to try a slice of that cake to say they have tasted it’s sweet victory.

pablo (2)Most people don’t like trying and then failing. But what happens when you try “doing what everyone else is doing” and don’t get the results expected? You could throw up your white flag and be done with it, or, you can isolate what the problem was in the first place and try again.  

Here are some aspects to have in place before you get started on any rehab type project, covered in more detail by this INVESTOPEDIA article, Top 5 Must-Haves For Flipping Houses: http://www.investopedia.com/articles/pf/07/flippers.asp

  • A Group of Experts
  • A Handyman or Knack for Home Improvement
  • A Good Lay of the Land
  • A Good Estimator
  • A Dose of Patience


With the correct value give to these points above, you success and profits could be greatly affected.

In the end, is it more beneficial or harmful for you to fix & flip a home?  That depends on if you like taking risks to accomplish your goals. As I’ve heard before, “Successful people take big risks knowing they might fall hard. But they might succeed more than they ever dreamed.”

Are you looking to invest in a rehab project but still need financing? If your favorite bank has turned you down, give Ken Walker of Sun Pacific Mortgage & Real Estate a call! (707) 523-2099

 

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