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Loan of the Week – Giving Faster Financing

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Loan of the Week

We received a request from a Sonoma County Broker, who had a borrower with a note that had come due. Unfortunately, this borrower needed more time to repair her credit in order to qualify for conventional financing, so needed a short-term Hard Money loan.

She required $550,000 to satisfy her present lender and she needed it ASAP.

With a loan to value at 55%, we were able to finance her loan in just 12 days!  She now has 2 years to improve her FICO score and apply for a conventional loan.

If you find yourself needing a fast loan regardless of the amount, think Sun Pacific Mortgage and call us at 707-523-2099.

Los Angeles First Quarter Report

Los Angeles First Quarter Report

As we entered this unchartered territory in the first quarter of 2020, the real estate market reflected some unevenness. Results for this past quarter in Los Angeles County were location and market specific. Looking at various communities within the whole of the county we find these statistics:

  • Properties on the market moved quicker in the more desirable Westside neighborhoods because of historically low mortgage rates and average sales prices declining.
  • Strong sales in the Hills showed a 43% increase from last year. In fact, Beverley Hills had a 120% increase in activity over last year. It appears that buyers were taking advantage of a 6% decrease in average single-family home prices to $2.8M
  • Some communities on the East Side saw average sales prices for single-family homes increase compared to the first quarter of last year, while days on the market decreased by 27% from last year’s first quarter. Pasadena and San Gabriel had sale price increases of 7 and 30 percent, respectively. In the La Cresenta//Glendale/ Montrose/Sparr Heights markets, condominium sales were extremely strong.
  • Overall, Metro Los Angeles saw a strong 25% increase over last year’s sales activity. Downtown LA and Hollywood condominium sales showed a dramatic increase of 75% compared to last year’s first quarter and days on the market were down 16% for Downtown.
  • South Bay’s home sales activity was mixed. Overall, they declined by 2% year-over-year, with the exceptions being Hermosa Beach with a 41% activity increase, Rancho Palos Verdes at 32% and Playa Vista at 75% increase. Home prices were relatively flat except for Playa Vista where the average sale price hit $2.7M, a 45% gain.

What this picture will look like for the 2nd Quarter of 2020 is anyone’s guess. If virtual tours and digital conferencing continue, we may be seeing some leveling out of the market, but not a significant decline.

If you are unable to qualify for a conventional home loan and are looking for financing during these stressful times, look no further than Sun Pacific Mortgage. Although we are physically located in Northern California, at least half of our clients come from Southern California. We successfully handle all our business remotely, either online or by phone. Give us a call at 707-523-2099 or send us your questions and/or scenarios through our website email forms.  Let’s see if we can help ease some of your stress during this unprecedented time.

Recently Funded – Together We’ll Get It Done

Agents Of Shield With The Help Of More Of Our Friends, We Continue To Stay Busy, Providing Our Alternative Financing Services To Realtors, Brokers And Borrowers Alike.

Together We Will Get You A Loan!

With the help of more of our friends, we continue to stay busy, providing our alternative financing services to realtors, brokers and borrowers alike.

Call us today at 707-523-2099 with any questions or scenarios.  We’ll let you know what we can do for you and/or your clients!

Recently Funded By Us

Location:  Guerneville, Sonoma County
Finance Program:  Investment Property Refinance
Loan Size:  $375,000
Days to Close:  14
Reason Came to Us:  Needed fast capital to purchase another property.

Location:  No. Hollywood, Los Angeles County
Finance Program:  Investment Property Purchase
Loan Size:  $397,000
Days to Close:  14
Reason Came to Us:  Difficult to prove income as self-employed.

Location:  Oakland, Alameda County
Finance Program:  Investment Property Refinancing
Loan Size:  $1,200,000
Days to Close:  23
Reason Came to Us:  Property condition poor and needed cash for big remodel.

Location:  Rancho Santa Margarita, Orange County
Finance Program:  Primary Residence Temporary Refinance
Loan Size:  $460,000
Days to Close:  14
Reason Came to Us: Needed cash to make repairs to home before selling property.

Sonoma County Real Estate Report for March

Sonoma County Real Estate Report For March

In examining the March real estate market results, it is important to recognize that there is a time-lag of 3-6 weeks between a listing coming on the market and an offer being accepted.  With this in mind, almost all the sales data we have as of the first week in April reflects the market before the shelter-in-place went into effect. For all the Bay Area counties March median sales remained quite strong.

According to Realtor.com, March real estate statistics for Sonoma County read like this:

Median List Price:  $715,400 (up 7.6% over last year)

Median Listing Price per Sq.Ft.:  $406.

Median Sales Price:  $636,000

Average Sales Price:  $776,202

Median Days on the Market:  46 (trending down since last month)

Number Sold:  251 (up 4.1% from February)

Active Properties:  667 (as of April 5)

Other statistics from various sources:

  • Median sales price for single-family homes rose 6.6% year-over-year and 3.1% compared to last March.
  • Sales rose 2.9% year-over-year
  • Single-family homes pending totaled 348
  • Median sales price for condos was up 16.2% year-over-year, but condo sales were down 10.9% compared to last March
  • Condos are selling in 59 days
  • Days of inventory for homes is now 80

Spring is usually the most active selling season and often sees the highest median sales prices of the calendar year.  Give the rapidly changing socio-economic factors in play due to the present pandemic, experts are hesitant to predict how this season will play out.

The good news is that realtors and lenders have found creative avenues around the shelter-in-place restrictions.  They are utilizing all the digital and video media available from Zoom to Skype and every platform in-between. Virtual tours are still happening, listings have been going into contract, and escrows continue to be executed.  We are a resilient community that has weathered both fires and floods, and we will weather this hardship, too.

Stay calm, breathe, and carry on…this, too, will pass and we will all come out stronger.

Loan of the Week – Getting Them Done

April Guys With Superman Heros

Gathered More Friends…To Ensure You Get Your Loan!

Loan of the Week

Recently, a broker sent us a borrower who was looking to refinance a rental property.  He wanted to pull cash out of his equity to do some necessary debt consolidation. He wasn’t qualifying for conventional financing due to his credit and wanted to resolve this.

The property was in Los Angeles County and the loan he required was $532,000.  With an LTV of 64% we were able to find an interested investor and full complete the transaction in less than 3 weeks.

At Sun Pacific Mortgage we are known for our skillful resolution to lending issues, and we pride ourselves in helping to relieve stressful situations.

If you are looking for a resolution to a stressful real estate problem, want to consolidate debt or use equity in your home to pull cash out, give us a call at 707-523-2099!  We have helped thousands like you to find a comfortable way out of a seemingly impossible situation.

Real Estate is an “Essential” Business

Real Estate Is An Essential Business

With strict regulations in place regarding self-distancing, what is to become of the real estate market? While California real estate sales is now deemed an “essential” industry, it does not mean back to business as usual.  All realtors still need to follow health guidelines and each city and county can stipulate what that looks like for their community.

“Necessity is the Mother of inventions”, but with regard to the situation we face today in the midst of Covid-19, it could be rephrased to read:  “If necessity is the Mother of Invention, than adversity must surely be the Father of Re-invention.”  In keeping with this philosophy, realtors across California have devised old and new ways to stay in touch with their clients and pursue their business, maybe not in the usual way, but still successfully.

Among the ways realtors and clients have been able to communicate is through a virtual tour.  Utilizing this tool, a realtor agrees on a specific day to walk through the prospective home with his/her buyer via a video app.  (Prior to this exercise, all would need to agree on the app to be used that would be the most comfortable for the buyer.) While “showing” the home, the realtor would comment on the features in each room that are noteworthy and could possibly be overlooked, e.g. high ceilings.  Finally, when the realtor has returned to his/her car, there should be a discussion regarding the overall feeling for the property and any specific questions the client might have.

Among the other tools realtors can employ are the old standbys of email, text, phone calls and video calls.  With the latter, be sure that your client is using the same platform you use. Maybe when we are on the other end of this pandemic, we will find these tools to be valuable enough to keep

Bottom line:  Stay calm and breath!  This won’t last forever, and our clients will appreciate whatever efforts you make on their behalf during this time of crisis.  Homes will still need to be bought and sold when we see the end of this.

We’re All Ready To Get You A Loan

We’re All Ready To Get You A Loan

Despite all, we’re continuing to help Homebuyers, Homeowners, Realtors & other Brokers and Lenders with our alternative financing programs.

Alt-A Hard Money with lower rates can benefit those just barely missing out on conventional financing qualifications; Hard Money can be fast with FICO not the determining factor and any property condition is okay.

Call today 707-523-2099 with any questions or scenarios.  We will quickly let you know what we can do for you and/or your clients!

Recently Funded By Us

Location:  Windsor, Sonoma County
Finance Program:  Primary Residence Alternative Refinance
Loan Size:  $419,000
Days to Close:  20
Reason Came To Us: Debt consolidation

Location:  Seaside, Monterey County
Finance Program:  Investment Property Refinance
Loan Size:  $376,800
Days to Close:  21
Reason Came To Us:  Property condition poor and wanted to fix & flip.

Location:  San Carlos, San Mateo County
Finance Program:  Primary Property Refinance
Loan Size:  $560,000
Days to Close:  15
Reason Came To Us: Credit was poor so wasn’t getting approved elsewhere.

Location:  Truckee, Nevada County
Finance Program:  Primary Property Refinance
Loan Size:  $550,000
Days to Close:  26
Reason Came To Us: Difficult to prove income as self-employed.

What is a Good Return on Real Estate Investment?

Brian Babb Xbwhrt87Mq0 Unsplash There Is No Question That Investing In Real Estate Can Be Profitable. However, It Is Important To Be Realistic And That You Keep Your Goals Achievable.

There is no question that investing in real estate can be profitable. However, it is important to be realistic and that you keep your goals achievable.

First of all, you need to keep in mind that you will not make a profit overnight.  Secondly, you need to understand that the location of your property will play a critical role in determining how successful you are, and thirdly, the return on your investment also depends on how much money you have to further invest in fixing up the property or keep up with the maintenance.

When it comes to real estate, the primary focus of real estate investor should be on the return on investment. If it is too low, the investment may not be a good idea, but if the return on investment is high, your real estate property could be profitable for a long time, says House Match Real Estate Sales & Property Management.

One of the main reasons why some people fail to make profits in real estate is because they have little or no idea about the return of investment or set unrealistic expectations. But if you have a property that is in a good location and the maintenance costs or upkeep is at a minimum, there are formulas you can use to calculate the return on your investment.

Here are some ways to measure your return on real estate investment:

1. The one percent rule

Eugene Chystiakov C3Iwi6Amexm Unsplash There Is No Question That Investing In Real Estate Can Be Profitable. However, It Is Important To Be Realistic And That You Keep Your Goals Achievable.

The easiest way to determine how much money you will make is to use the one percent rule. As per this quick rule, your monthly gross rental income should be at least 1% of your investment.

For example, if you bought an investment property for $500,000, the monthly rental should be at least $5,000. Over 12 months, this equals to $60,000 and even after accounting for all usual expenses, you will still have 6-8% leftover. That can be considered a good return on investment.

2. The capitalization rate

Markus Spiske 2Vmcpbur6W8 Unsplash There Is No Question That Investing In Real Estate Can Be Profitable. However, It Is Important To Be Realistic And That You Keep Your Goals Achievable.

Another formula that is widely used to calculate the profitability of real estate investment is the cap rate. This is basically the ratio of the net income of the investment property to the purchase price.

For example you invest in a home that is worth $250,000 and rent it out for $1,500 a month. After deducting the maintenance fees, you are left with a net monthly income of $1,000 or $12K over 12 months.

The cap rate, in this case, will be $12,000/$250,000 or 4.8%. Whether this a good rate of investment depends on the location of your property, tenant stability, and how much maintenance is required. In general, experts indicate that a cap rate of about 5% is desirable and the higher, the better.

3. Cash on Cash (CoC) return

William Iven Damhwsryp9C Unsplash There Is No Question That Investing In Real Estate Can Be Profitable. However, It Is Important To Be Realistic And That You Keep Your Goals Achievable.

Another metric that is also used to calculate profitability from real estate investment is the Cash on Cash (CoC) return. Unlike the capitalization rate, CoC calculates the 12 months returns on your investment based on net income and cash investment.

For example, you obtain a loan of $300,000 with $60,000 down payment. The monthly rent is $1500, and your operating costs are $4,000. The CoC is as follows:

12x $1500-$4000/$60,000 – 23.3%

But on the other hand, let us assume you paid cash for the property: a sum of $300,000 instead of a mortgage.  The CoC, in this case, would be 12 x 1500-4000/$300,000= 4.6%. The reason for this variation is because CoC depends on how you finance the property. Most real estate investment experts suggest that a CoC between 8-12% is good.

4. Return on investment (ROI)

Kelly Sikkema M98Nrbuzbpc Unsplash There Is No Question That Investing In Real Estate Can Be Profitable. However, It Is Important To Be Realistic And That You Keep Your Goals Achievable.

Measuring the ROI allows you to assess the efficiency of the investment. This is the gold standard of assessing profitability when investing in real estate.

For example, you buy a real estate property for $500,000 and pay an additional $20,000 for things like closing fees, lawyer fees, and the initial home insurance. You rent out the property at $3,000 a month. In this case, the ROI will be as follows:

12 x$3000/$500,000 + $20,000 = 6.9%

Most experts suggest that an ROI between 7-15% is good, but others insist that it should be higher than 20%.

The calculation of the profitability of a real estate investment is just one part of the story. The things that matter include the location of the property, size, type of tenants, and the approximate maintenance and repair costs.

If you own a beach resort, you will never be short of tenants, but if you have a property in a crime-infested area, not only will you have difficulty in finding tenants, but these tenants may not look after your property very well.

It is important to do your groundwork well and choose the property with a great deal of thought. If you do your homework, there should not be any reason why you cannot make a profit.

Loan of the Week – We’ve Brought Help!

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Manning Up to Keep Loans Getting Done!
Loan of the Week

A mortgage broker from Contra Costa County sent us a borrower who was facing a very difficult problem.  Their daughter had some medical issues requiring quick attention, and they needed to find a way to pay for the medical bills.

By refinancing their owner-occupied home, they were able to find a solution to their overwhelming financial burden.  Their loan for $350,000 was funded in 13 days!

With an LTV of 26%, and with a first lien position, we quickly located interested investors. Our Hard Money loans have proven to be the solution to many clients, who either need to fund quickly, or just fall short of the requirements for a conventional loan.

If you or someone you know needs alternative financing, give us a call at 707-523-2099 and we will quickly let you know what we can do for you.

The Covid-19 Virus and Its Impact on California Real Estate

The Covid 19 Virus And Its Impact On California Real Estate

One of the burning questions facing all Californians today is: with Californians self-distancing and “hunkering down” for the immediate future, what will the impact be on our real estate market and investments?  While this pandemic is causing an economic downturn, it hasn’t yet affected home values and most economist are still optimistic with regards to the real estate market in general.

Real estate sales, rentals and leasing are a $445 billion industry in California and has been a major driver in personal wealth for property owners over the past decade.

Seeing the effect of the pandemic on the world economy naturally raises questions regarding other markets, like real estate.  Experts have made clear that an economic slowdown does not equal a housing crisis, nor does it mean a repeat of the 2008 debacle.  There were other economic issues at work during that recession that have been resolved by laws that were enacted since.

What we may be seeing is a longer wait for homes to sell once they hit the market and there may be some lowering of prices, but no major crash is predicted by the experts.  California housing demand remains strong and technology makes it easier to perform real estate shopping and buying online. Some adjustments we might be seeing are that viewing houses and inspections may be done more by appointment and with hyper vigilance for sanitizing, but it will not be impossible.

While we home-bound, this time would be good time for potential buyers to get their paperwork together for pre-approval, and for sellers to get their disclosures completed and begin the decluttering process.  Sellers can also line up the pre-sale inspections and necessary photographs so this time at home is not wasted.

Here at Sun Pacific Mortgage, we are a family-owned and operated business, providing alternative financing needs for over 3 decades.  During these unprecedented times we still continue to provide our services to you! Our loan programs could be the answer to solving your real estate funding problems when other lending institutions are short- handed.  We specialize in fast, short-term mortgages.

Give us a call at 707-5323-2099.  We can handle all the necessary paperwork via phone call and email.  Stay well!

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