Sunrise Homes & Renovations, Inc.

3 Traps First-Time Homebuyers Fall Into — And How To Avoid Them

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3 Traps First-Time Homebuyers Fall Into -- And How To Avoid ThemWhen someone purchases their first home, this is a significant step. There are a number of issues that people need to think about because purchasing a home is typically someone’s most significant investment.

With this in mind, there are three common traps that first-time homebuyers often fall into. Fortunately, there are ways to avoid these traps as well.

Looking At Homes Before Applying For A Mortgage

Perhaps the biggest mistake that people make is that they look for homes before they apply for a mortgage. Without a successful mortgage application, it will be difficult to find a home at all. Of course, people enjoy looking at homes because it puts their future into perspective. At the same time, it is important to have an idea of how much home someone can afford. This will be difficult to do without knowing how large of a mortgage someone will be approved for. Apply for a mortgage before looking at homes.

Draining The Savings Account

Most people will want to put down some sort of a down payment. After all, this can help one get a lower interest rate on their mortgage. At the same time, don’t think about the down payment as simply a number in the savings account. Calculate how much of a down payment is truly necessary. People shouldn’t have to drain their entire savings account for the down payment. This money might be needed for closing costs, home repairs, and other potential emergencies. 

Not Working With Trusted Professionals

The internet has provided people with instant access to vast amounts of information. This has the benefit of allowing the new home buyer to educate themselves and do research on homes to purchase, mortgage financing options and a lot of other home buying topics. However, the internet can also provide incorrect information or only partial information. 

That’s why it’s so important to work with trusted real estate and mortgage professionals who have your best interest in mind. Feel free to ask them a lot of questions and get specific answers about your personal financial situation and home purchasing needs. They are trained and have years of experience making sure that you get the best combination of things to serve your needs.

Purchasing A Home

These are a few of the most important issues that every first-time homebuyer should think about. It can make a significant difference in someone’s financial future. Pay attention to these and reach out to your local network of trusted professionals today!

How Much Do I Need To Start Investing In Real Estate?

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How Much Do I Need To Start Investing In Real EstateIt is important for everyone to diversify their investments and one of the assets that people often look toward is real estate. In a healthy market, real estate should appreciate in value.

It is often less risky than investing in individual stocks and can provide a much higher return on investment than a typical bank savings account or even a money market account. On the other hand, people often think that they require a large amount of money to even think about investing in real estate. This is not always the case.

Buying Property Outright

One of the most straightforward ways to get started in the real estate investing market is to buy property outright in an area that is set to appreciate in value. Then, people can rent the property out to tenants as a way to generate a steady stream of income. This is why many people think that they need a large amount of money. Buying property is expensive and purchasing buildings in cash can be prohibitively expensive. Fortunately, there are other ways.

Joining A Real Estate Partnership

Another option is to join a real estate partnership. In a partnership structure, the various members pool their money together to buy large buildings. These buildings might even include individual apartments that can be rented out. Joining a real estate partnership is a more feasible option to get started in the real estate investing market. People might even be able to join for as little as a few thousand dollars.

Buying Shares

Finally, there are real estate crowdfunding partnerships popping up as well. Joining a real estate crowdfunding group is similar to buying shares of a company in the stock market. This offers an opportunity for people to get involved in the real estate market for an even lower cost. This is becoming a more popular option across the United States.

Invest In Real Estate

In the end, people do not necessarily require a large amount of money to invest in real estate if they know where to look and who to ask. There are plenty of ways to get started in the real estate investing market.

If you are in the market for a new property, be sure to consult with your trusted real estate professional.

Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise Strategy

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Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise StrategyHave you ever seen a scientific experiment with things growing in a Petri dish? This is a metaphor for how neighborhoods grow as well. Things in a Petri dish grow towards the areas that have more nutrition to attract them and repel from areas that have bad things that they do not want.

A popular neighborhood does a similar thing. It may have boundaries that are certain street or other physical barriers. Nevertheless, if the area builds its popularity, it tends to grow and might also cause an improvement in the surrounding areas.

Homes In Adjacent Neighborhoods

An adjacent neighborhood is one that is right next to another one. For example, in the Los Angeles Metro Area, just to the west of Beverly Hills is Century City. Century City is a fine area so it is usually called by its name. However, properties in Century City are also “Beverly Hills – Adjacent.”

This nomenclature is a bit like identifying a “used car” as a “pre-owned vehicle.” It is a marketing technique to say a home is located in a neighborhood adjacent to a popular one. However, those homes are indeed special. If the popular area appreciates significantly, this may have a positive impact on the neighborhoods surrounding it.

Mapping Adjacent Neighborhoods

It is a terrific strategy to look at the opportunities for buying a home in an adjacent area near the best neighborhood in town.

Use Google maps to find the map that includes the best area of town and what is around it. Then, research the listing prices for homes that are within the best neighborhood and those that are in the adjacent areas. For comparison, look for homes of the same style, type, and size

Zoom in on the satellite view of the streets to get a close look at the places just inside and just outside the official boundaries of a great neighborhood. It may be surprising to find areas that have a significant pricing differential, even just for a few blocks on a few streets. Those particular areas are worth further exploration.

Barriers To Progress

Be aware that physical barriers are stronger than psychological ones. A river, a very wide street, a public park or another major physical barrier can permanently separate a neighborhood from another adjacent one. These may block a growth opportunity.

What to look for are adjacent areas where the barrier between the neighborhoods is psychological and there is nothing at all very different between the great neighborhood and two blocks down the street. These few blocks in the adjacent neighborhood are where one might discover a treasure. It is possible to find a home that has a slightly better price. It might appreciate at the same rate as the best neighborhood next door or faster to catch up with other similar homes.

Summary

Using the adjacent neighborhood strategy may help avoid buying a home only in the most expensive areas that may be over-priced. Many find that the adjacent areas are just as nice and a home there may be a better value. 

Work with a real estate agent that knows the area well. Your agent should be able to help you discover the up-and-coming adjacent areas and properties that might offer an enhanced investment opportunity.

Culture Clash: Why Boomers Are Moving Back to Big Cities

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Culture Clash Why Boomers Are Moving Back to Big Cities“Baby Boomers,” defined as people who were born between 1946-1964, are the wealthiest generation to ever retire, as well as the largest. According to U.S. Census Bureau projections, the population of people 65 and older will increase by 36% between 2013-2023 and is expected to outnumber children by 2034 — for the first time in U.S. history.

Interestingly, in the decade since the Great Recession,people aged 50-59 are increasingly bucking tradition and moving to urban areas. As Boomers retire en masse, they are headed for major cities, favoring amenities-loaded condos over large single-family homes with manicured lawns. What is responsible for this change in older adults?

Home Maintenance Considerations

One of the largest factors causing boomers to migrate to cities is home maintenance. Once adult children are out of the home, many people downsize into more manageable houses. Larger suburban homes take a lot of work between routine home maintenance, not to mention larger emergency repairs. 

It makes sense then, that people 55 and older accounted for the largest increase in the rental home segment from 2007-2017, with a 38% rise in those older than 55 and a 43% increase in people older than 65. In stark contrast, the increase in rentals in people aged 54 and under in the same time period was less than 10%. 

Creature Comforts

Another thing responsible for older adults moving away from the suburbs and into more urban areas is the abundance of amenities large cities can offer them. Exceptionally walkable cities such as those where universities are located tend to cluster upscale condos and apartments near major shopping outlets and public transportation lines, as well as a multitude of options for shopping, dining, cultural experiences, and medical services. 

Cities like Lawrence, Kansas and Bloomington, Indiana have taken note of the trend — and the fact that boomers have about 70% of all disposable income in the United States — and have taken steps to lure retirees in, offering recreation opportunities specific to seniors and making public transportation and preventive healthcare more accessible.

This trend of boomers moving back into large cities, while fascinating, makes perfect sense and is expected to continue for the foreseeable future as cities make themselves more and more appealing, as well as accessible.

If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate professional.

Tips On How To Get The Home You Want In A ‘Seller’s Market’

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Tips On How To Get The Home You Want In A 'Seller's Market'A “seller’s market” happens when there are more potential buyers than homes for sale. In a seller’s market, people looking for a home may feel frustration and not easily find the home that they want. When they find a home for sale that they like, the seller of the home may receive multiple competitive offers at the same moment.

The seller is in an excellent position when this happens. Sellers can pick from the purchase offers to choose the one they like the most. Even if an offer is the same as another one, sometimes it is not the offer chosen by a seller.

Causes Of A Seller’s Market

Seller’s markets arise because a particular area is very desirable. There can also be limitations that do not allow any further development of residential properties in an area. Well-established neighborhoods in up-scale market areas are typically likely candidates for becoming a seller’s market. Easy credit financing is another contributing factor. 

Check the median sales price as a percentage of the listing price for an area. If it is greater than 100%, this is a seller’s market.

Buying A Home In A Seller’s Market

If you must live in a certain area, and there are extremely compelling reasons for buying a home in a seller’s market, then expect to pay more and work harder to get the type of home that you want. Here are some tips about how to buy a home in a seller’s market:

1. Work With A Top Real Estate Professional: You want to go into this challenge along with the best professional help that you can find. You want to choose a top real estate agent that specializes in the market area that you desire. They should know the neighborhood intimately and represented both buyers and sellers in that market.

2. Pre-Approved Credit Commitment: Apply for mortgage approval before looking for a home to buy. Request more than the amounted needed and pay for a written loan commitment that guarantees the financing is both approved and legally-committed for the time, plus a little more, that you need to find a home to buy.

3. Move Fast: Make a purchase offer as quickly as possible when a new home listing comes up that meets your criteria.

4. Cash Earn Money Deposit: Offer the seller earnest money in cash that is a significant amount to accept the purchase price you offer. By cash, we mean physical dollar bills of around $5,000 or more. Cash makes people sign a deal.

5. Offer More Money: If you want a specific home, make your purchase offer 1% or more than the asking price. Also, offer in writing to match any other competing offers plus a bit more. You may get into a bidding war and have to pay much more to get the home. 

6. Off-Market Properties: Seek to buy a property that is not yet for sale. Ask your agent to call people who they sold a home to before. Ask everyone in the local area if they know of one that is like the one you want. Knock on doors of homes that are one you might like to buy and ask the owner if they will sell the home.

Summary

To get the home you want, try to be flexible with the basic criteria of what type of home it is. Work with a great real estate agent. Move fast and use our tips to be competitive with other potential homebuyers.

The Risks And The Rewards Of Buying Homes In An ‘As-Is’ Condition

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The Risks And The Rewards Of Buying Homes In An 'As-Is' ConditionWhen considering buying a home in an “as-is” condition, the buyer takes all the risk of anything needed to bring the property back up to current building codes and make it ready for occupation or re-sale. There can be bargains in as-is properties if you know how to hunt for one. 

How To Find As-Is Bargain Properties

To find these properties, look for those that sell at auction for tax liens or other reasons for governmental asset-seizure. The might be distressed as-is properties that are foreclosures, short-sales, or estate sales.

A popular home-flipping strategy is to buy an as-is property at a price that is far below market value, make the repairs necessary, and then resell the home for a price that covers the repair costs plus makes a profit.

Tips On Buying As-Is Properties

It is a guessing game when buying an as-is property. There may be very unpleasant surprises for repairs that are very costly and are not obvious. Hidden problems include major plumbing troubles, severe electrical system repairs, shifting or broken foundations, dry rot, and termite infestations.

Here are some tips about how to improve the chances of getting a better deal when buying an as-is property:

Home Inspection: Conduct a professional home inspection. This is insurance to avoid a serious mistake. It is worth the few hundred dollars to pay for one, even if you do not get the property. 

Work With A Contractor: Being a contractor yourself is great. Many contractors buy and flip houses when not working on projects for others. The next best thing is working or partnering with a contractor. Just doing a walk-through with a remodeling contractor helps identify things that need to fix. Then, the estimates for the renovation can be done more accurately.

Major Systems: Assume the major systems will need work or replacement. The biggest unknown expenses in a renovation come from the heating, cooling, and other major systems.

Check Drains: Running water into the sinks for a few minutes is an easy way to see if the drains are blocked.

Roof: Based on the home’s age, assume the roof needs replacement if the roof is more than 20 years old. Inside the home look for evidence of roof leaks that left behind stains on the ceilings and walls that are signs of water damage.

Probe For Termites: Drill tiny deep holes into wood, in an inconspicuous area, to test for termite infestation and/or pay for a pest control inspection.

Foundation Problems: Go into the crawl space under a home to look for foundation problems, such as major cracks and shifting. Another indicator of ground movement and settling, which may be a problem, is that the doors in the home are not level or plumb and do not close properly.

Summary

It is possible to get a bargain when buying an as-is property; however, it is not a certainty. If you are just starting with flipping houses, it is better to partner with professionals to get helpful guidance. Work with a qualified real estate agent who specializes in distressed properties and partner with a reputable building contractor to increase the chance of success.