Tag Archives: Real Estate

What is $358.00?

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Answer: Price per square foot for a luxury home in TX.

It is true that you can put a price tag on anything, well maybe not everything, but you certainly can put one on a luxury home. According to the 2018 Texas Luxury Home Sales Report by the Texas Association of Realtors (TAR), the median price for a Texas luxury home  remains unchanged at $1.35 million.

Houses priced over $1 million dollars are considered “luxury” and 5,123 of them sold across the state of Texas from October 2017 to November 2018, up 11.5% from the previous year. The average price per square foot for a luxury home was $358.00. This is up 2.5% from the first ten months of 2017. A median house in Texas carried an average price tag of $128.00 per square foot.

From January to October 2018 the average time a luxury home spent on the market in Texas was 94 days, a decrease of four days from the same timeframe in 2017. It makes sense that the bigger price would lead to a longer time on the market because there are few buyers who can afford the higher price and it takes longer to get a big loan.

For comparison, here are some statistics courtesy of Realtor.com.

Austin-Round Rock, TX, Median Price $350,000. Days on the Market, 65.

Dallas-Fort Worth – Arlignton, TX Median price $335,000. Days on the Market, 58

Houston-The Woodlands-Sugar Land, TZ – Median Price $350,000. Days on the Market, 65.

Killeen-Temple, TX, Median Price $200,000. Days on the Market, 68

San Antonio-New Braunfels, TX – Median Price $285,000. Days on the Market, 66.

For more on luxury houses, read “Livin’ Large: Texas’ Robust Luxury Home Market,” a Tierra Grande article by Real Estate Center Senior Data Analyst Joshua Roberson. https://www.recenter.tamu.edu/news/newstalk-texas/?Item=21652.Read more at Texas Association of REALTORS

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

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Photo by Pixabay on Pexels.com

 

A Boost for the Credit Score

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News from Wall Street Journal reporter Anna Maria Andriotis this week tells us that the major credit reporting companies will soon be adding data from consumers’ utility and phone bill paying history to their credit reports. This is a move that she says will likely boost the credit scores of millions of people and increase traditional loan approvals. According to Andriotis, Experian will start factoring in this payment information early next year.

Consumers who have low or no scores because they have no history of borrowing and subprime borrowers whose scores are currently lower than what some lenders require will likely see their credit scores go up.

Some of these changes are coming about because of pressure the banks themselves have placed on the credit reporting industry and its regulators because they want to make more loans.

To make this work, people will have to opt into the new program and link the bank accounts they use to pay their phone and utility bills to Experian, allowing the company to track their monthly payments.

The credit score shows a borrower’s ability to responsibly use and pay off credit cards and loans, and in the future other types of bills.

The five factors that are most important in determining a credit score according to Thad Merrill are

an individual’s payment history,

the amount of outstanding balances,

length of credit history,

the types of accounts, and

the number of recent credit inquiries.

Factoring in utility and phone bill payment histories will help with at least the length of credit history.

If you are interested in borrowing for real estate investment, hard money lenders offer alternatives to those who have bad credit. They can also offer faster access to financing with less stringent eligibility requirements. However, investors may pay a higher interest rate over a shorter period. Hard money lenders are semi-institutional lenders who are not required to adhere to the policies and regulations that are required of banks. These requirements really tightened up after the 2008 financial crisis. If  traditional lenders are looking to lend more money, it might be because they think the good economy “still has room to run.”

Good economy or bad economy,  it is always a good idea to improve your credit score, particularly if you want to invest in real estate.  A good credit score opens up more financing options and will speed up the loan approval process, and you won’t miss out on that great deal.

Patrick@InvestorsLendingSource.com

512-213-2271

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Photo by Pixabay on Pexels.com

Reference: Andriotis, AnnaMaria, WSJ December 18th, Want a Better Credit Score? Soon, Your Cellphone Bill Could Help.

 

 

Doing the Math: Purchase, Rehab, Refinance, Cash Out

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The markets have been extremely volatile lately and they say the anxiety meter has shot up to screaming level.  However, according to Caleb Silver, Editor-in-Chief, Investopedia is not predicting a major market decline.  And, whether the market is up or down, I am here to help you find ways to put your money into other types of ventures, like fix-n-flip real estate projects big or small. It works like this:

  • You Purchase
  • You Rehab
  • You Refinance
  • You Cash Out

Silver also says in his daily e-mail that “Seasoned investors have learned to moderate their expectations and build their portfolios to endure all kinds of markets.  It takes discipline and a lot of learning to do that well, and even the best of them still get their faces ripped off now and again (a technical expression for suffering massive losses). Still, having unreasonable expectations is the first step to setting yourself up for disappointment.”

Ah yes, setting yourself up for disappointment: I remember Christmas mornings when I was a child as a time of too much expectation.  By the time Christmas morning came around, my expectations were sky high and no matter what great present my parents or Santa Claus brought me, I was going to be disappointed because nothing could live up to the fantasy in my head.  So, the day was never as much fun as it should have been.

I’d say that Silver (good name for an investment geek) is trying to warn us . He says that Vanguard (a massive money manager) recently surveyed its customers and found that their expectations were way off from its own market predictions. Vanguard found that the average retail investor expects stock to return more than 10% a year on average and people with their money in pension funds expect 7.5% average annual returns.  Unfortunately, Vanguard expects a 4.6% return on stocks.

So put in your time studying so that you can put your money to good use making more money for you.  Think about your options and don’t freak out. As Silver says, “When the Anxiety Index picks up, volatility tends to follow.”  But as Friday’s Investopedia headline read  “REMAIN RATIONAL.” (see investopedia.com)

Here is a rational option to study:

Purchase, Rehab, Refinance, and Cash Out of a Multi-Family Building

Loan Requirements

  • Min 5 units
  • Loan Amounts – $250,000 – $5,000,000
  • Interest Only – 2yr Term
  • 1st Lien Position Only
  • No Prepayment Penalties
  • Up to 80% for Purchase and Rehab
  • Up to 70% for Refinance and Rehab
  • 55% for Cash Out

Borrower

  • Min FICO 670
  • Full Recourse
  • DSCR / Occupancy – No requirements while being rehabbed
  • Min Liquidity of 9mo of debt service + 20% of rehab budget

Appraisal Requirements

All loans require a full appraisal with internal property pictures and dated within 120 days of loan origination.

Lending Areas

All major metro areas and small market areas nationwide.  Non-lending areas include rural and high-risk areas.

Patrick@InvestorsLendingSource.com

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Museums and Investment

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The Guggenheim Effect

When you are buying a house to fix up or lending money for that fix-n-flip project you hope to profit from, the value the property has now and will have after the renovation is complete is what you are focusing on. You will be thinking about neighborhood and what makes a neighborhood a good place to live. These days, according to Alina Dizik of the WSJ, you should look around for a nearby museum.

Museums are revitalizing neighborhoods all over the world. The neighborhood revitalizing phenomenon of a museum is called the Guggenheim Effect. According to the Economist and the WSJ the Guggenheim Effect is the phenomenal revitalization of an industrial town that was dying, Bilbao in Spain in this instance, into a “sleek tourist destination” by the construction of a museum (Economist).

Walkability, and Safety, Interesting Things to Do

According to research done by Stephen Sheppard, an economics professor at Williams College in Massachusetts, “property values of homes near museums rise between 20% and 50% over the course of five years (WSJ ). ” Homebuyers, according to Dizik, are drawn to a museum building’s bold architecture, its rotating exhibits, “its guest lectures, and attractive indoor and outdoor common areas.” Some are looking for safety and amenities in one place. Entertainment and restaurants that you can walk to are also big draws.

There are museum districts in several towns in Texas. Look around your town and see if a museum is raising property values near you. This may be where you want to invest next.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

Mercedes-Benz_Museum_201312_08_blue_hour.jpg

Mercedes-Benz Museum in Stuttgart, Germany, during blue hour.  Julian Herzog [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 4.0

Austin Museums

In Austin, the museum district is more of a museum partnership and there are many museums in the downtown. There is a plan here to connect the walking and biking trails into a big loop of urban trails that will extend 30 miles, traversing the city from Lady Bird lake to Walnut Creek Metropolitan Park, creating a safe walkable and bikeable commute route through downtown. So living near or on that route may be attractive. http://www.austinmuseums.org/

Mexic Arte Museum, 419 Congress Ave

The Blanton Museum of Art, University of Texas Campus

The Harry Ransom Center, 300 W. 21st street, University of Texas Campus

Mondo Gallery, 4115 Guadalupe St

Bob Bullock Texas State History Museum

Yard Dog Art Gallery, 1510 S. Congress Ave.

Arthouse at the Jones Center, 700 Congress Ave.

Houston Museums

There is one in Houston and it boasts 4 walkable zones, 19 museums, and over 2,300 residents according to http://houmuse.org/. Homes in the museum district sell faster than average compared to other neighborhoods in Houston. Realtor.com The neighborhoods and surrounding area are a mix of historic homes with character and charm, to modern townhomes, and high rises.

Museum of Fine Arts Houston Expansion

Moody Center for the Arts at Rice University

The Houston Center for Contemporary Craft

Czech Center Museum

Buffalo Soldiers National Museum

Lawndale Arts Center

Houston Museum of African American Culture

Children’s Museum of Houston

Houston Museum of Natural Science

Dallas Museums

In Dallas, the museum district is the Arts District downtown. It is a cultural hub of music, art, and theatre. The Dallas Arts District is bordered by St. Paul Street and Ross Avenue as well as major throughways Woodall Rodgers Freeway and Central Expressway. http://www.dallasartsdistrict.org/

Dallas Museum of Art

Modern Art Museum of Fort Worth

Nasher Sculpture Center,

Perot Museum of Nature and Science

Kimbrel Art Museum

Dallas Contemporary

Meadows Museum

San Antonio Museums

In San Antonio, a river walk extension completed in 2009 is called the Museum Reach. It extends past the zoo, the Japanese Tea Gardens, Brackenridge Park, the Pearl District, and three of San Antonio’s museums, all listed below. https://www.thesanantonioriverwalk.com/explore/museum-reach

The Do Seum, San Antonio’s Museum for Kids, 2800 Broadway

The Witte Museum, 3801 Broadway

San Antonio Museum of Art, 200 West Jones Avenue

 

What do all these neighborhoods have in common, interesting things to do, walkability, and safety.

References

Dizik, Alina, To Discover an up-and-Coming Neighborhood, Look for a Museum, The Wall Street Journal, November 25, 2018

The Economist, The Guggenheim Effect, Can other cities imitate Bilbao’s cultural-tourism success? August 18, 2018