Phoenix 1st Time Home Buyers Assistance!

Just a quick update, I'll have more info later.

But here's the jist of it:

The City of Phoenix is offering a $15,000 incentive to 1st time home buyers!!

BUT!! (there's always a "but") This incentive is only available for certain Fannie Mae foreclosure homes. These homes are completely move in ready!

That's right! Completely refurbished! Including appliances!! Yeah! Move-in-ready!!

AND! These properties will NOT be listed on the MLS!! So, in order to find out about them, you need to talk to a realtor who's got the info from COP! (that would be ME!)

Requirements are basic FHA requirements as far as credit score and DTI (if you don't know what that is, call me).

But you only need 1% down, NOT 3.5%!! That's what the $15,000 is for! to cover down payment, and closing costs, and then whatever else you want!

The $15,000 becomes a "silent Second", with no interest, no payments for the entire time you own the home!! You do have to repay the loan when you sell the home, but when else is someone going to offer you $15,000 just to buy a home??

If you'd like more info, give me a call!

Erin Goldbach
Designated Broker
Vanguard Platinum Realty
602 524 0286

What's so special about April 30th 2010???

Why should that date mean anything to you?

April 30th...............

No, not your Mother's birthday. Not your anniversary. Tax day was two weeks before........

April 30th is when the New Home Buyer's $8000 tax credit ends!!!

That's a big deal!!

For 10 more weeks, if you buy a home, and you haven't owned a home in the last three years, you qualify for an $8000 tax credit! That's right! The Federal Government will send you a check for $8000!

What's the catch? There is none! You have to have the property under contract by April 30th, and close by June 30. That's it!

And there's also the Existing Home Buyer Credit of $6500! If you've lived in your home 5 of the last 8 years, and are up/down sizing because of a life event (you have a child, or one goes to college), you can get a $6500 tax credit when you purchase your new home!

Do you know someone who's renting? Do you know someone who's outgrown their current home?

Have them give me a call to see how I can help them get FREE MONEY!

Erin Goldbach

Vanguard Platinum Realty

602 524 0186

Seller Carry Back: A good approach for you?

In this real estate market, and lending environment, the difficulty for some people isn't finding a home to buy, but getting the financing to buy.

People are coming up with some creative solutions, but one that has been around for many years is a little known, but very simple one: The Seller Carry Back (sometimes also referred to as "the seller holding the Note")

What is a Seller Carry Back? Simply this: The owner of a home, who owns the property free and clear, acts as the lender, and "lends" the buyer the money to buy the home.

Before I get into an explanation of what that means, let me clarify one thing. The Owners MUST own the home outright. It must be free of any mortgage. If it is not, then the situation becomes what is called "A Wrap", which is a more complex, though not undoable, situation.

The thing that confuses people the most about a Carry Back is the notion that the owner/seller is "lending" the buyer the money to buy the home. Obviously, no cash is actually transferred from the seller to the buyer.

The Title of the property is transferred from the Seller to the Buyer in exchange for a promissory note for the sales price of the home. The buyer agrees to make installment payments on the home at a specific interest rate, usually with a balloon payment due in a specific period of time. If you think about it, this is exactly what happens with a conventional loan, but the actual "loaned amount" is on paper only.

Why would a Seller want to do this? Why would a buyer??

The advantage for a Seller is the chance to make substantially more than just the sales price of the home. Imagine if you were a Seller, and you agreed to sell your home to a buyer on a Carry Back for the price of $120,000, at an interest rate of 6% in an amortized 30 year loan, with a balloon payment due at 5 years.

Sounds like gibberish, right? Its actually pretty simple. The Buyer is going to make you monthly payments, of principle and interest, at 6%, with the remaining principle balance due in 5 years.

So, what's the advantage?? Over the course of those 5 years, the Buyer is going to pay you almost $35,000 in interest, while they lower their principle to $112,000. That means, when they refinance the home to pay you the remaining balance, you didn't just make $120,000 off of the sale, you made $155,000 total!!!!!!!

That's Right!!! By carrying the loan, you made yourself an extra $35,000!!

So, what's the catch? What's the down side? The biggest downside is the buyer not paying, and then you have to foreclose on the property. And depending on the condition the buyers leave the home in, that may be a big risk. Another risk is that at the time the balloon payment is due, the buyers may not qualify for a mortgage, or the property may not appraise for the value.

These things to consider, and there are safeguards that can be put in place to avoid, or limit these risks.

Why would a buyer want to purchase a home through this means?

The real estate market over the last 2-3 years could be summed up by saying "Bad things happen to good people". Or, as a lawyer friend of mine likes to say, "Bad luck happens".

Many people who have lost their homes due to the market and the economy are people who in other conditions would be qualified buyers. They're people who need some time to get their feet back underneath them financially, and might not need too long to do so. These are the people who can be good candidates for a Carry Back.

The advantage to these buyers is that they get to buy a home when they can't qualify for a conventional loan, and enjoy all the benefits of home ownership while repairing their credit. People who have sold homes in short sales are primarily the people who fit in this category. A short sale does impact your credit, but for a shorter period of time than a foreclosure, typically less than two years. So, a carry back with a 3 or 5 year balloon would be an ideal means for them to get back into a home, while giving them a great shot at refinancing when they're able.

And there are other variables that can make this more attractive to the Seller. Currently, the minimum down payment required for an FHA loan is 3.5% of the sale price. On $120,000, that's $4,200. There's no reason that a Seller can't require a down payment on a Carry Back as well, so there's the possibility of an up-front lump sum payment, be it a 3, 5, or even 10% down payment. And many buyers would jump at the chance to purchase a home under those conditions!

Carry Backs are a very attractive option, under pretty specific conditions, but they have the possibility of bringing a Seller a handsome return for (in my opinion) a fairly low risk.

If you have any questions about Seller Carry Backs, as either a seller or buyer, don't hesitate to email, or call me!

Erin Goldbach

Designated Broker

Vanguard Platinum Realty

602 524 0186

Erin@ErinGoldbach.com

Welcome to Vanguard Platinum Realty's blog!

Who are we? And what do we do?

Vanguard Platinum was founded by Erin Goldbach (that's me), and I'm the Designated Broker. I've been a realtor here in the Phoenix area for 6 years. I've spent that time truly honing my skills and studying the market. To put it bluntly, I'm the guy you want on your side. A lot of realtors are in the business part time, and treat it like a hobby. I take it very seriously. And I should! After all, we're talking about the biggest investment most people are ever going to make! That's serious business, and I want my clients to know that they've got a professional in their corner who really knows what he's doing.

My philosophy is this: I succeed only when YOU achieve YOUR goals! Whether you're a first time buyer looking for a starter home (and believe me, now is the time!) or an investor looking for someone to help you build and manage a portfolio, I want to be the guy who helps you reach your goal!

And this is an amazing time to be either a first time home buyer, or an investor.

Why? Simple: Home prices are down! WAY down!!

And for First Time Home Buyers, you get an $8,000 Federal Tax Credit! And that can be used at the time of purchase, to cover your down payment and closing costs!

Translation: You can buy a home with NO MONEY DOWN!

The market is equally as good for investors! Anyone with some cash, or who's willing to put some "sweat equity" into a property, can really take advantage of the market!

And the market today can work for investors as either a "fix and flip" or "hold and rent".

What does that mean? With the current property prices, its not hard to find distressed properties, that can be bought for as low as $20,000. These properties usually need some work, but are generally structurally sound, and when fixed up with $10-20,000 worth of remodeling, can then be resold for $20,000 profit, or more! I'm working with an investor now who picked up a home in the area of 43rd Ave and Northern for $110k. He's spending $20k to rehab it, and I'm going to start marketing the home at $170,000. I expect to get multiple offers, and the final sale price to be around $180,000, if not higher. That's a $40-50,000 Profit!!

But a investor could also buy a property for $80-100,000, with an Investor Rate Mortgage, and be looking at a monthly mortgage payment of about $550, with taxes and insurance. That same property, once cleaned up, will rent for $800-$1,000 a month. So, once I've found you a tenant (did I mention I do Property Management? LOL!), you're looking at $200-$400/month positive cash flow! And the value of that property is only going to go up as the market recovers from the slump we've been in!

Now, you might think that all I'm interested in is the money side of Real Estate. But really, what I enjoy is doing my job well, and making sure my client is happy. I'm as excited by the prospect of helping a young couple find that home they're going to start building a life together in, as I am when I find an investor a property that he can really sink his teeth into and make a living on!

Like I said, My success is measured by how many of your dreams I help you achieve!

Vanguard Platinum Realty

Erin Goldbach

Owner/Broker

602 524 0186

Erin@ErinGoldbach.com