THE MARKET IS DOWN, BUT SHOULD I INVEST NOW?

Most of you know me as your realtor and mortgage broker, but guess what? I'm an investor too, and I stand in your shoes very often, as different deals come up on the radar screen. At face value, some deals do look very attractive with strong returns - even positive cashflow. But of course, there are just so many things to consider.
I'd like to share with you an analysis of a property that I've contemplated purchasing recently. It's an unlisted Single Family Home in the Upper Peninsula.

The Estimated Rental Income on this property is about $3,000.00/ month.

Purchase Price is expected to be $600,000. With a Down payment of 20%, the 1st Mortgage would be $480,000.00, given market interest rates on a 30 Year Fixed, and including Taxes, and Insurance, the monthly cost would be $3,500/month.

While there is a negative of $500 per month at first, I'd hope to breakeven after 3 years of increasing rents, assuming an average of 5% increase per year; and from then on assuming no other expenses the property would be in the black.

So that takes care of the cashflow problem.

But another major issue is the valuation of the property. This particular property was worth sold for nearly $900K only 2 years ago. WOW! But does that matter in today's market?

Answer is NO. What matters is today's market value, which I estimate at $700K+, and how much it will sell for when I decide to transfer it. What we need to do here is understand the local market!, which I'll address on my next blog. Stay Tuned

Pulse on the Market

For a 1700 Square Foot Single Family home in Burlingame, you'd have to pay $1.3M in Ray Park. And for a 1700 Square Foot Single Family home in Hayward, you can pay as little as $300K. The fact is there is something for everyone, and a possible bargain in most areas. Obviously in Hayward, it's saturdated with short sales, and prices have not been this cheap in a long time. Though the honest truth is - it does take a while to actually close on a short sale house due to the necessity of getting an approval from the lender who is slated to lose a lot of $$$.
In the high-end areas, there are still deals to be had for those homes that have sat on the market for awhile, and offer a good point of entry for the homebuyers.

Hey if you have any questions, drop me a line, I'd be glad to answer them for you!

8th Asian Pacific American Heritage Celebration

Have a deep appreciation of Asian culture? Here is something to check out...

San Mateo is celebrating its 8th Annual Asian Pacific American Heritage on Saturday, May 10th from 10am - 5pm at the San Mateo Central Park Recreational Center (50 East 5th Ave. San Mateo, 94401)! For details and information, simply click on the flyer below...



If you got some free time, please come on out! Cynthia and I will be there and would love to have your company. Hope to see you there!

Kirk Cameron is Still Growing

Nothing about real estate here, except that I wanted to let you all know that Kirk Cameron is coming to town, and speaking of his faith and who he is today.

You do remember Mike Seaver, don't you? the fun-loving young prankster on the sitcom Growing Pains? Well, he's all grown up and so are most of us who watched that show in our youth.

Kirk Cameron is speaking at Harbor Light, 4760 Thornton Ave, Fremont, CA 94536 on May 8th at 7:30pm, $12 entrance fee.

Cynthia and I will be there, and would love your company.

Trouble in Borrowing Money against the House

The mortgage industry has taken such a tremendous shift over the past year.
These days 100% financing is pretty much extinct, as well as even 10% down payment purchases. It looks as though 20% is the bare minimum especially with the entire state of California being declared a "Declining Market" as I found out today from my wholesale lenders at Chase. Typically, once a market is determined as being "declining", a lender will lower their Loan-To-Value Ratios down by another 10%, making it that much harder to borrow.

Who then will be able to buy these fantastic opportunities that's waiting for an investor/buyer to pick up?

The SAVERS! This market really rewards those who have saved well - enough to put that down payment of 20%, and possibly breakeven on the cashflow if it's an investment.

For some of you who find the word "Save" as foreign, I would suggest starting with a budget. Here's a link that offers free tools to help you on the road to financial freedom and success. http://www.crown.org/Tools/

Save On.