HomeRun Homes Rent to Own Homes Blog

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HomeRun Homes is a centralized marketplace which helps people Find or Sell a Rent to Own Home, both Nationwide and Globally to the thriving Rent to Own Market. http://www.lease2buy.com

January 31, 2012

Use A Mortgage, Rent It, Or Use Other Options

Hi Folks,
   Thanks for joining me here. I am so glad to write for you! OK, I promise not to corny.

   Over and over we hear that it is tough to get a mortgage. If you can't get a mortgage, what are some other options. What if you want a home, but don't want a mortgage?

   "It’s getting more and more difficult to qualify for a traditional mortgage", writes CA Hagy in an article titled, "Three Alternatives to a Traditional Mortgage". What are some reasons why you might be declined? Hagy names a few possible reasons, i.e. a foreclosure in your past, inability to prove a "decent cash flow", and self employment resulting in "irregular income?".

   If you fall into one of the categories mentioned above, you're not alone. Hady points out a few mortgage alternatives that might help you meet your goal(s).

   One option is to go the route of "Seller Financing", in which the "current homeowner offers to sell you the house", and you make payments to them but "they continue to hold the note until you have paid off the home". Hagy says that for a homeowner that cannot find buyers due to the tight lending situation. Seller Financing may be a "feasible option". The seller basically becomes the lender, and an agreement is drawn up with the full details of the transaction.

   "Borrowing from a Self-Directed IRA", writes Nagy, is "typically designed for investors who want to buy a home but don’t have the upfront cash to make it happen". As defined in the article by Nagy, "A self-directed IRA is somewhat like a Roth IRA or a traditional IRA", however, it's more flexible, For example, the IRA can invest in real estate, etc, but the "main catch", as Nagy calls it, that the IRS "does not allow you to use your own account or the account of a relative or business partner", thus, you "cannot use your own self-directed IRA to purchase a home. But you can use the money from another person’s self-directed IRA if they are not related to you". Confused? Nagy says that there are many investors "who will allow buyers to use money from their self-directed IRAs as an investment deal", and the investor would "own an interest in the property", or, the investor can simply "loan the money like a regular mortgage".

   The other option, "Leasing or Rent to Own", is something you might be quite familiar with, especially if you are a frequent visitor on our website. In a nutshell, the buyer can rent a home before actually purchasing it. The rent to own arrangement, which is also referred to as lease to buy, lease to own or a lease option, is one in which the buyer has an option to buy the home at a specified price within a specified period of time. This option would also benefit a seller unable to find qualified buyers, and would certainly benefit buyers who need time to save for a down payment and to "improve their credit score", says Hagy.

   Let's stay on the topic of Renting and Owning for a moment.

   "Sometimes it is better to rent than to own", writes Leah Ingram, in her article, "Rent or Own a Home?", who admits that "in today's real estate market it's not surprising if people are a bit gun shy about buying or owning a home." and she provides 3 tips to help you decide on renting vs buying.

   Ask your self; Do you have documented income, a good credit history, and a steady income? These are some important items to have in order to buy a home, in the first of three tips, courtesy of Jessica Edwards of Coldwell Banker Real Estate, within the article from Ingram. Edwards adds that if your income is unreliable, "getting tied down to a mortgage may not make the most sense financially".

   The next tip is to make a "timeline" of how long you will stay in the home; if it's just for a couple of years, you are "less likely to see a significant financial return on your investment", says Edwards, and says that if you stay under 2 years and sell it, "you may find yourself having to pay capital gains taxes".

   "Crunch the numbers", says Edwards, in her third tip. Add up the mortgage payments real estate taxes, insurance payments, maintenance costs, etc. and compare these costs of ownership vs. the cost of renting (monthly rent and average utilities).

   Ingram says that "buying doesn't always make sense and neither does renting", and suggests speaking with a "real estate expert, your tax person, and a financial professional" before deciding to rent versus buy a home.

What are your thoughts? We'd love to hear.


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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #traditionalmortgage #foreclosure #SellerFinancing #homeowner #SelfDirectedIRA #IRS #Tax #RealEstate #RenttoOwn #leasetobuy #leasetoown #leaseoption #capitalgains

January 25, 2012

Buying a Home: Benefits, Mistakes, and Tips

Hello All,
   Glad to have you back with me.

   Quick Question: Are you looking to buy a home? Do you own a Home? Do you own a few homes? Do you sell homes? If you answered "yes" to any of these, this Blog post could be a huge help in meeting your goals.

   We all know the "American Dream" about homeownership, and the pride that comes along with it. As Jonathan Slappey writes in his story, "Top 5 Reasons to Buy a Home in 2012", this dream is "a very feasible aspiration for 2012."

   One of the "reasons" that Slappey lists was Appreciation, and in combination with the low current prices and historically low mortgage rates, he writes that you can "almost ensure your home’s appreciation in the future" (He adds that "many foreclosed homes are available for a fraction of the original cost.").

   Before jumping in, potential homebuyers need to plan, and then plan again, and then again.

   "Property insurance, taxes, homeowners association dues, maintenance, and higher electric and water bills are some of the costs first-time homebuyers tend to overlook.", writes Polyana Da Costa in her story titled, "Common mistakes first-time homebuyers make". Taking one step back, Da Costa writes that "Home buying doesn't begin with home searching. It begins with a mortgage prequalification". Ed Conarchy, a mortgage planner at Cherry Creek Mortgage in Gurnee, Il, was quoted in Da Costa's story, in which he said that, "You get preapproved, and then you find a home". so that you'll "financial decision versus an emotional decision". Sound advice.

   Now, about those expenses Da Costa listed above; If a homebuyer spend their entire savings for the down payment, closing, etc, then what happens? Conarchy says that this is "one of the biggest mistakes first-time homebuyers make". Additionally, in the same story, Da Costa warns that "Any new loans on your credit report can jeopardize the closing", since lenders pull credit reports prior to the closing to "make sure the borrower's financial situation has not changed since the loan was approved".

   Getting back on course, some other reasons Slappey listed as positives for buying a home this year were tax-related. "Property Tax Deductions" are a major benefit, as Slappey writes that "real estate property taxes for a vacation home and first home are fully deductible". Another reason, "Preferential Tax Treatment", which he says that since Capital Assets are given preferential tax treatment, this would benefit you if you own the home over a year and you "receive more profit than the allowable exclusion after the sale of your home" (the profit will be considered a Capital Asset).

   On the topic of Taxes, the average first-time homebuyer may not be aware of the ins and outs, since they might be buy-and-hold for many years, a real estate investor would be more aware of tax incentives. In the story, "Tax incentives and tax deductions for real estate", Iylce Glink and Samuel Tamkin write that "Real estate is one of the few businesses in which you can accumulate wealth, buy and sell properties repeatedly and never pay any federal income taxes if you follow certain rules". They add that by using certain depreciation rules, "you can make money from renting properties and create a scenario where you might make a great amount of income yearly but pay no federal income taxes on that income". This, however, is far outside the scope of this particular Blog post, albeit quite interesting.

   "Equity Building", which Slappey calls a "new trend being used by some homeowners", basically means that homeowners can/do add money to their monthly payment to pay it down faster. The result is a shorter home loan length, which means owning their home faster, along with some additional benefits.

   The final reason Slappey listed as a reason to buy a home this year: Pride. An example he gives is blasting your music as loud as you want! "No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride", says Slappey.

   Do you agree?


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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #buyhome #sellhome #foreclosedhome #lowmortgagerates #homebuyers #downpayment #closing #PropertyTax #CapitalAsset #realestate #incometax #rentproperties

January 20, 2012

Good Ones Up, Bad Ones Down, Thumbs Up

Hi Folks,
   Hope you've stayed warm this mid-January week.

   Some important numbers were released this week, which we like to condense for you, since we know it's hard for you to read through all of the Economic Indicator Press Releases and funky jargon that some of them contain.

   For starters, some good indicators were up. The release of New Residential Construction figures for December showed us that both Single-family housing starts in December were 4.4% above November, and also that Privately-owned housing completions in December were up 9.2% above November. Additionally, the National Association of Realtors, or NAR, released their figures on Existing Home Sales for December, which were up for a third consecutive month, at 5.0% above November (Nationwide). Regionally, the biggest gainer in Existing Homes Sales was the Northeast, where the figures jumped 10.7% from November. These very positive increases led to a statement from NAR chief economist Lawrence Yun, who said that we might be seeing signs of a sustained recovery.

   Excess Housing inventory is not good...it's Bad. Why? Simple Supply and Demand Economics...more homes means lower prices. That being said, the NAR release also pointed to a 9.2% drop (less inventory), putting the available inventory at the lowest level since March 2005.

   These figures do not represent the entire puzzle, as there are still many areas still struggling, and additionally, other important figures will be released next week (Pending Home Sales Index, FHFA Monthly House Price Index, and New Residential Sales). Stay tuned for details.

   Thoughts and Opinions are always welcome...


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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #NewResidentialConstruction #Singlefamily #housingstarts #housingcompletions #Realtors #NAR #ExistingHomeSales #recovery #Housinginventory #ResidentialSales

January 17, 2012

From A Sad Foreclosure To A Happy Home

Hi Everyone,
   Hope you had a nice long weekend if you had yesterday off, and a belated tip-of-the-cap to Dr. Martin Luther King for the peaceful way that he traveled to bring equal rights to African-Americans, and to bring peace amongst the different races of people on our little planet.

   Back in late summer, I wrote a post titled, "Feds Finally Keen on Rent to Own Housing", where we discussed a possible Government program aimed at selling bundles of foreclosed homes owned by Fannie Mae (FNMA) and Freddie Mac (FMCC), to real estate investors, with the properties converted into rentals. The key point here is that these homes will be sold in bulk vs. individually.

   Fast Forward a few months, and the Government is hoping to "launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties", in a story by Tami Luhby for CNN Money. Just last week, Federal Reserve Chairman Ben Bernanke cited the program as a possible way to help us get through the housing crisis, and per the article by Luhby, titled, "Turning foreclosures into rentals", Bernanke said that "Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery".

   After dropping mortgage rates down to historic lows, the Fed started thinking "outside of the box", and needed to find creative ways to solve the crisis. Perhaps after a prolonged stall in foreclosure procedures, the Fed sees the wave of foreclosures coming in their crystal ball, and as Luhby writes, there are close to 2 million homes in the late stages of delinquency, according to Lender Processing Services. These foreclosed properties can destroy home prices since they "often sell below market value", says Luhby.

   By converting these homes to rentals, the neighbors are happy, the Fed is happy, and things can start looking better for everyone. What are your thoughts?

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #MLK #MartinLutherKing #AfricanAmerican #RenttoOwn #FannieMae #FNMA #FreddieMac #FMCC #realestateinvestors #FederalReserve #foreclosedproperties #homeprices

January 12, 2012

Local Community Trends Influencing the Rental Home Market

Hello Friends,
   Welcome back, and hope your year has been going great so far!

   We are proud to share an article with you from Personal Real Estate Investor Magazine, in which I was quoted a few times. The article, "Look for Community Appeal", which was written by Teresa Bitler, appeared in the Trends in Rentals Section (in the November - December 2011 issue - Please see a copy of the article linked here).

   From the vantage-point of our website, Lease2Buy.com, I was asked to comment on the market trends that I have seen over the past 10 years of running the site, and more specifically, over the past few months.

The following two excerpts include my comments from within the article:

#1: "The housing market is definitely influencing the rental market, says Robert Eisenstein of HomeRun Homes. A growing number of people are in foreclosure, have sold their home through short sale, or can’t qualify for the necessary financing to purchase a home. Those people still need a place."

#2: "Eisenstein has also noticed a spike in requests for rent-to-own properties, possibly indicating that while people have been forced temporarily to enter the rental market, they would eventually prefer to own their own home."

   This is a great article, and very timely. The golden rule is to "know your market". Know the prices, demographics, employment figures, etc for the specific community that you focus on, either as an agent, investor, or both.

   How well do you know your local market?

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #RealEstateInvestor #rentalmarket #renttoown #properties #shortsale #foreclosure #financing

January 5, 2012

3 Tips for Sellers of Real Estate in 2012

Hi Folks,
   Hope all is well so far in this shiny new year!

   If you were waiting for the Holiday season to end before selling your home, there are some tips you can follow that will help you during the new world order of the 2012 Housing Market. To be exact, we have highlighted 3 tips just for you, and hopefully, these will be very helpful for you.

Tip #1: Price Flexibility. Make sure either you or your agent have all of the local sales, including those of short sales and foreclosures, so you can see what they sold at vs what they were asking, writes Steve McLinden in an article on Bankrate.com

Tip #2: Clean up. Neaten up. Paint, etc. Neglecting even the cheapest repairs can turn a buyer off. You want to make sure that you have dotted every "i" and crossed every "t" when it comes to curb appeal. It's more important than ever before, it seems (due to the over-abundance of homes on the market to choose from).

Tip #3: "Trump your techno-fears", writes McLinden, and suggests hiring a listing agent "steeped in mobile platforms", and mentions Facebook and other social media. He even eludes to a trend where Some owners are even making YouTube videos to showcase their homes, and thus, "making it easier to quickly link to potential buyers via email"

McLinden listed a total of 12 Tips in his story, but I feel that these 3 tips (not in the same order as his story) will be the dominant factors to help sell your home in 2012. What do you think?

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #SellRealEstate #HousingMarket #shortsales #foreclosures #listingagent #mobileplatforms #Facebook #YouTube #video #socialmedia

January 3, 2012

Happy Flipping New Year !

Hi Everyone,
   Welcome back to our first business day of the New Year!

   Back in 2010, the FHA, a major insurer of mortgages, issued a waiver in 2010 that permitted "Flipping", which is buying a home for a low/cheap price, and then resell them for a profit, and all within 90 days. This measure was taken to provide stability, primarily in the low-income communities, which have been overloaded with foreclosures.

   The waiver was set to expire, however, the FHA has extended their "anti-flipping regulations" through 2012, per Les Christie for a recent CNN Money article titled, "FHA says: Flip that house". Acting FHA Boss Carol Galante said that this was extended in order to help "accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight". With foreclosed homes, property values drop, which can have a domino effect with even worse consequences for these communities. When the "Flippers" come in, they usually rehab the homes, which helps them sell the home, and improves the "conditions for neighborhoods", per Christie.

   Flipping was not always the Golden Child, and that is the reason originally for these anti-flipping rules (There was predatory flipping, which took advantage of "unsuspecting borrowers").

   To qualify for this waiver, the sale must be an "Arms length" transaction between a seller and buyer with no relationship between them, and there are certain other requirements that need to be met if the new sale price is 20% or more above the previous selling price.

   Christie writes that since the waiver went into effect in early 2010, the FHA insured in excess of 42,000 loans to buy homes that were being resold within 90 days, for a total of over $7 billion in mortgage principal.

   Have you taken advantage of the FHA Waiver in any of your transactions? Can you share your experience with us? We'd love to hear from you.

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #FHA #Flipping #foreclosures #waiver #properties #rehab #predatoryflipping #armslength