In the next couple of days we will see what plan Congress has approved for the American people and finally see what’s in the fine print for the tax payer.  It is at least in my mind almost impossible to fathom that we are in this situation, we are no better than a third world country grasping for a quick fix as you must realize that the 700 billion  is only a small portion of the overall loss. We really don’t know what it will ultimately cost.

Just think about how many small business owners have been forced to let their employees go or close after years of hard work worse yet the retiree’s that put in their life savings in company stock like that of AIG  which was highly rated  and now only to find that their investment is  worth pennies.

But then again looking back it was foreseeable that if you gave people loans for  100% or even worse the reverse amortization loans requiring only that they “state” their income wouldn’t have huge ramifications.  You know something is wrong when your home doubles in price in a couple of years without doing more that planting some flowers and putting on a fresh coat of paint.

It will be interesting to see what will happen in the next decade, will we have double digit inflation? Not sure, but can’t see how we can avoid it. This administration is leaving us with a war and 11 trillion dollars in debt.  Just imagine if you had 11 trillion dollars credit card and intended to pay but…you weren’t making enough income. What would be the solution? A part time or a huge raise, the bottom line is more income and more income will lead us to inflation. Hopefully this will also mean that more jobs will come back to the USA I have no problem with globalization if the rest of the world was like the USA..

What I mean if they had a similar lifestyle paid what we pay for insurance, food, housing, braces, etc and the trade was even. But to be honest I much rather pay more or have less consumer products  as long as my neighbor has a job and I don’t mean Wal-Mart.

Come April 15  the fed will get another wake up call to action as they will undoubtedly collect less  taxes. They will either raise taxes, which really doesn’t make too much sense you know the old blood turnip or help us make more income.

I am convinced that things will improve with the next administration   and there will be growth opportunity so buckle your seat belts as we are almost there.

Thanks,

Luis Pezzini

Los Angeles County, California  -  We invite everyone to visit our open house at 12123 Otsego on May 24 from 1:00 AM to 4:00 AM.

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I honestly think it is. You owe it to yourself to at  least to find out what's out there. There are great REO's properties, these are bank owned properties, get a free list in Los Angeles www.ForeclosureListLA.com.

Also did you know FHA is alive and kicking... 3% down that's hard to beat. Call us and get qualified.

Thanks,

Luis Pezzini

310-275-2076 

For my people it is the only way they will be able to purchase a home in their lifetime. So, if you are planning to purchase a home in the next year it would to your benefit to find out as much as possible on FHA and any other programs that might be available to you. Most of these programs are not permanent so it is important to act quickly as things change.

So what is FHA?

The Federal Housing Authority AKA FHA, is a government agency established in the 1930, 1934 to be exact, it was created as a means to improve homeownership by providing insurance protection to the lenders who provide mortgages to homeowners.

It is important for you to understand that FHA is an insuring agency; it does not make actual loans.

So what kinds of loan does it insure?

The most common and popular of the program are the following three:

 1) 203(b) they are 10,15,20,30 year fixed rate periods.

 2)  The 203(h) is designed to help victims of major disaster who have lost

      their homes, and are in the process of rebuilding or buying a new home.

3) 203(k) is focused for repair and rehabilitation of single family properties.

The bottom line is that thanks to these loans you may be able to purchase your next home as the required credit score is very loan, the minimum credit score is currently 580. Refinance is also available as long as you have 85% loan to value.

There are many other advantages in using FHA; they make it possible to get a loan in many cases where conventional lenders would walk away. It is important that you understand that not all lenders are not necessarily FHA approved, if they are not approved they can not provide the FHA option. All lenders, mortgage brokers must go through a lengthy, timely and expenses process to get approved with FHA.

As you interview prospective lenders ask if they are FHA approved.

Luis Pezzini

Theloansurveyor.com

SunsetStripRealty.com

Bonus Guest House!!!! Main

• 1,197 sq. ft., 1 bath, 2 bdrm single story - MLS® $395,000 - Under Market Value!!!!

Close to Baldwin Hills, Los Angeles

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Building a real estate portfolio with Condos and Single Family homes

You can build a real estate portfolio in West Hollywood just like any other business. This is something which should be done to show the finance companies you are a good credit risk.  You may need to generate a positive cash flow and sometimes the only way to do this is with a loan, remember leverage is a key to wealth.  Having a good business portfolio shows you are serious about your business, it will take discipline and hard work but at the end you will have the results.

You do not need much to start building a real estate portfolio in West Hollywood, condos, single family duplex, four-plex or even land. There are parcels of land, empty lots, in areas where new developments are going up.  This may only seem like a small investment.  The day will come when someone wants that vacant lot and will offer to buy it.  The land does have a value.

In order to increase value you can have your lot  re-zoned.  A residential lot for single family homes can be worth quite a bit.  Getting an over sized lot zoned for multi-family housing can increase the property value, especially if the area is growing.  When a property can be zoned with a dual purpose it makes it more attractive to developers, your job is to find and buy these overlooked properties.

Using the vacant land in your real estate portfolio for collateral on a loan will allow you to further your real estate investments.  You may not think these little pieces of land can amount to much.  The lender can assess the properties to determine the value.  You may be surprised to find that as few as 2 vacant lots in the right district can generate a portfolio worth $200,000.  That is a substantial amount of money when trying to get a loan.

As you get to know the real estate market you are dealing with, condos, single family you will want to check with the regional planning board for the area.  You may come across plans for a development to be implemented in 5 or even 10 years.  This is the area you will want to purchase any vacant lots available. There will come a time when these lots can more than double in value because a developer needs them to start or even finish a project.  Building a real estate portfolio is easier than you think just by using vacant land.

Rental properties have value also.  There are many distressed homes in West Hollywood  that an investor can pick up for pennies on the dollar.  Fixing them up and renting them out can generate a positive cash flow almost immediately.  This looks good in any real estate portfolio.  You may even consider getting the rental unit approved for HUD housing.  The income is guaranteed.   When you have a guaranteed income, the lenders tend to favor you more.

Here goes: 

Conventional and Jumbo Loans

Conventional loans are secured by government sponsored entities or GSEs such as Fannie Mae and Freddie Mac. Conventional loans can be made to purchase or refinance homes with first and second mortgages on single family to four family homes.

In general, Fannie Mae and Freddie Mac's single family, first mortgage loan limit is $417,000 in 2006. This limit is reviewed annually and, if needed, changed to reflect changes in the national average price for single family homes. The current loan limit applies to all conventional mortgages delivered after January 1, 2006.

2006 Conventional Loan Limits

First mortgages

• One-family loans: $417,000
• Two-family loans: $533,850
• Three-family loans: $645,300
• Four-family loans: $801,950
• Note: Maximum original loan amounts are 50 percent higher for first mortgages on properties in Alaska, Hawaii, Guam and the U.S. Virgin Islands.

Second Mortgages

• $208,500 (in Alaska, Hawaii, and the US Virgin Islands: $312,750)

Loans which are larger than the limits set by Fannie Mae and Freddie Mac are called jumbo loans. Because jumbo loans are not funded by these government sponsored entities, they usually carry a higher interest rate and some additional underwriting requirements. A strategy to lower your overall interest payments if your purchase or refinance balance is above $417,000 is to use a combination of both first and second trust money, referred to as an 80/10/10, 80/15/5 or 80/20. Every situation is different, but it is one more option to consider.

In addition to common loan structures such as fixed rate, adjustable rate and balloon loans, Fannie Mae and Freddie Mac also have loan programs for low to no down payments, community lending and affordable housing initiatives, construction to permanent, home improvement and reverse mortgages.

If you have any additioanl question please do not hesitate to e-mail me lpezzini@SunsetStripRealty.com.

Thanks,