Burnsville Minnesota Real Estate News

Real Estate Investing in Minneapolis

2012-01-10T02:18:00.000-08:00

As prices keep coming down, it's been a great market for investors. This is the best time to invest in real estate. A lot of distress sales. There are about 5 out of 10 homes on the market are distressed. Because there's so many of these types of properties on the market,it's driving down the price. If the price is under $150,000, it's a seller's market. There's more buyers in this price range. If a seller has his short sale on the market for months without an offer, they will purposely reduce their price well below market to create multiple offers. Multiple offers drive up the price so in doing that, it actually make people outbid each other and the sold price ended up being higher than the list price. It's not a bad strategy for the seller. Northeast Minneapolis is becoming a nice place to start investing. There's not a lot of duplexes and other multi-family units for sale there. If you're looking to buy a duplex, Northeast Minneapolis is great place to start. Many renters are flocking there to live. That makes it very attractive.

Why Invest In Real Estate?

2011-10-06T02:20:00.000-07:00

Most millionaires have a significant portion – if not the majority of their wealth in real estate.
Real estate is always in demand because no matter what happens to the world in terms of politics or economics, people will need places to live, businesses will need places to operate, governments will need places to function. Below are 5 points as to why you should invest in real estate.

1. FINANCIAL INDEPENDENCE
Most of your income comes from passive sources so you don’t work if you don’t want to.
For you, financial independence might be $1,500 per month
It’s not how much you make, it’s what you do with it that counts!
If you earn $1 million and spend $1.2 million, you don’t have wealth. If you are using credit to buy depreciating assets like clothes, cars, jewelry, or anything else that goes down in value, you’re digging yourself into a hole that can be very hard to get out of.
Not all debt is bad. When you use debt to buy things that increase in value and generate profits, you are thinking and operating like a wealthy person. The idea is to spend as much of your money as possible (after you pay for your necessities) on appreciating assets: assets such as real estate or any business that will go up in value and generate profits. Then you can afford to buy depreciating assets because you can afford to buy them with cash.

2. THE LAW OF LEVERAGE
Investing in stocks or bonds requires a lot of cash. Investing in real estate will require a lot less.
What other assets can you think of where banks will lend even close to 100% of the value of the asset and you still make all the profit?

3. MANAGEMENT
You don’t have to quit what you’re doing to start making big money in real estate. Most people start part-time. As an investment, real estate completely puts you in the driver’s seat. When you buy stocks, you don’t have control – you’re investing your money in a company, but its officers and directors will decide how the company will operate.

When you buy precious metals, gems or collectibles, you’re at the mercy of the market.
But when you invest in real estate, you have control. You make the decisions. You make the money.

Think about it this way: if someone offered to pay your mortgage for a year and all you needed to do was invest 40 hours a year into maintaining and managing the property, you would do it wouldn’t you? Of course you would.

I. It gives you the right amount of control over your destiny.
II. It’s a turn-key management style. You can easily hire someone to fulfill necessary duties or subcontract out the tasks.
III. It’s not very “paperwork intensive”
IV. Great court system in place to handle disputes.

4. TAX SAVINGS
There are some great ways to avoid income taxes with your real estate investing.
1. Depreciation, interest, and expense deductions.
2. 1031 Exchanges.

Consult with your tax advisor because everyone's situation is different.

5. PREDICTABILITY
In Hennepin County, Minnesota has averaged a 6.43% decrease in value per year over the last 5 years. See the table below.

Average Sale Price in Hennepin County

Quarter,Yr Avg. Sale Price Price Change
Q 4, 2006 $305,300 --------
Q 4, 2007 $301,800 -1.18%
Q 4, 2008 $251,800 -16.57%
Q 4, 2009 $224,000 -11.04%
Q 4, 2010 $233,400 +4.03%
Q 2, 2011 $216,100 -7.41%

However, from 1980 to 2001, the value of real estate has been consistently rise for an average of 6% per year nationwide. Since 2006, the value has decrease, we can safely predict that the value will decrease for another few more years. Overall, the last 200 years, the value of real estate national has steadily increase.

Real estate value has been decreasing since 2006. Also, the mortage rates are in the 5's and lower. Take advantage of the lower prices and low interest rates. The rental market is also very strong here in the Twin Cities. There's never been a better time to buy real estate than now.

10 Things Not To Do When Purchasing a Home

2011-09-29T03:11:00.000-07:00

There are several actions a mortgage professional will advise
you not to take before and during your home loan process.
1. Do not look for a home without being preapproved.
2. Do not suddenly pay off debts and collections or close accounts.
3. Do not apply for new credit cards.
4. Do not change jobs or change your pay structure at your current job.
5. Do not consolidate bills.
6. Do not make non-payroll related deposits into your bank account without keeping copies of checks.
7. Do not pack the documents needed during the loan process. These include W-2 forms, tax returns, bank statements, pay stubs, etc.
8. Do not choose a mortgage without researching all the different types.
9. Do not shop for, lease or purchase a car or other type of vehicle.
10.Do not incur more debt by making large purchases such as appliances.

By following the advice of your home loan professional, you will be on your way to obtaining the best terms and interest rates possible – as well as a smooth, on-time closing. If you must take one of these actions, it is wise to discuss this with your loan officer. We would love to assist you; please feel free to call us with any questions or to start the home-fi nancing process! Please call 952-808-2820 if you want to apply for a mortgage.

Real Estate Tip - Home Affordable Foreclosure Alternatives Program

2011-09-23T12:36:00.000-07:00

If you're upside down and thinking about selling your home. Attached is a link to this government program called HAFA that you could benefit from.

http://www.realtor.org/wps/wcm/connect/ro-content/ro/government_affairs/short_sales_hafa

Let me know if you know someone that's thinking about selling their home. Thank you.

The Value of Home Maintenance

2011-09-22T01:33:00.000-07:00

The Value of Home Maintenance
Regular home maintenance is key to preserving the value of your house and property. Read

Visit houselogic.com for more articles like this.

How is the market in Burnsville?

2011-01-04T13:01:00.001-08:00

There were 541 closed sales in Burnsville in 2010. Compared that to 641 closed sales in 2009. That is a 15.6% drop in closed sales. In 2009, the average sale price is $185,646. In 2010, the average sale price is $180,149. That is a 3% drop in average sale price. In 2009, the average day on the market until sale is 141 days. In 2010, the average days on the market before sale is 131 days. That is a 6.6% drop in days. In 2009, the percent of original list price recieved at sale was 92.7%. In 2010, it was 91.4%. What does all of this mean? Although the media is saying prices of homes are falling around 10-15%, in reality, it's really not. The sale price only drop about 3% in Burnsville and the number of days to sell took 10 days less. If you had offer on a home that was listed for $100,000, chances are, you could have bought for 91,400. There are some gems out there. The investors are out in full force to take advantage of this buyer's market. A lot of the realtors that were selling back in 10 years ago are saying that the prices today are about the same as in 1999 or 1998. Remember, the real estate boom started about in 2000 and continue until about 2007. If you bought prior to 2000, you probably got a deal. If you bought after 2000, you probably paid too much. In any case, now is a good time to buy because everything is low anywhere here in the Twin Cities. You can actually cash flow. Interest rates are also low. This is an investor's dream.

CDA Releases Over $41 Million In First-Time Homebuyer Financing

2010-02-18T14:16:00.000-08:00

People looking to buy a first home this year in Dakota County can consider applying for a First-Time Homebuyer Loan offered by the Dakota County Community Development Agency.

With interest rate of 4.99% and up to $10,000 in downpayment assistance, buyers will be able to maximize their purchasing power and at the same time have a stable, fixed rate first mortgage.

Dakota County is the only county in the state of Minnesota offering such a program this year after recieving special bonding authority from the U.S. Department of Treasury from a new program called the New Issuance Bond Program.

Interested buyers apply for the loans and downpayment assistance through qualified participating mortgage lenders (a list is available online at www.dakota.org/homebuyers.htm). Home buyers may also recieve the one-time $8000 federal tax credit for first time home buyers in addition to this program as long as they meet the requirements and deadlines for the tax-credit.

First-Time Homebuyer Loan terms and requirements are:
* Homebuyers must be first-time homeowners or someone who has not owned their primary residence in the last three years.

* Loans must be 30-year amortizing fixed-rate FHA or VA mortgage loans.

* Income limits are: One-or twon-person households: $83,900; three or more person households: $92,290

* Maximum purchase prices: are $276,683 for single family homes, townhomes or condominiums and $389,205 for duplexes (duplexes are eligible for the first time homebuyer loans, but not downpayment assistance)

Home Stretch Homebuyer Education class certificate is required prior to loan closing. Home Stretch classes are offered by the CDA and other metro area providers. For a list of CDA Home Stretch class dates, visit www.dakotacda.org/homebuyers.htm.

For more information, call the CDA's First Time Homebuyer Hotline at (651) 675-4442. Free pre-purchase counseling sessions are also available with trained CDA's Homeownership Counselors. To schedule a pre-purchase appointment call (651) 675-4472.

New Good Faith Estimate

2010-02-15T09:53:00.000-08:00

Recent guidelines from Washington have forced a change to the way that loan originators will disclose closing costs for all homebuyers. The purpose of the new Good Faith Estimate is to level the playing field for borrowers comparing loans to be able to make apples to apples comparisons for loan scenarios.

In essence, HUD is working to bring all lenders up to the same standard of excellence in reporting closing costs that they have always adhered to, estimating realistic fees that a buyer should expect to pay at closing with no last minute surprises.

What are the important facts you should be aware of in having conversations with homebuyers? Below are some important points to know:

1. All fees paid to the lender/broker are to be consolidated in one line, including processing fees, origination fees, etc. These charges cannot change from the original estimate without a material change to the loan requested.

2. In the event fees are being charged to obtain a lower rate, these are to be broken out and itemized for the borrower's ease of comparison to other loan programs.

3. Estimates for fees from government recording charges and third party settlement providers suggested are to be itemized and the lender is held to a tolerance of 10% for their accuracy. In the event the estimated charges exceed the amount listed by the allowable tolerance, the lender will be responsible for making up the difference.

4. Estimates for services that the buyer can shop for and do choose can change at settlement without the lender being held accountable. This can include title charges, homeowner's insurance, and initial deposits for an escrow account.
As always, I will strive to explain to you with an accurate estimate of closing costs and funds to close.

Fixer Upper Homes

2010-02-10T11:28:00.000-08:00

How many times you have gone out looking at a home that you liked but it needed so much work that you didn't think you could afford to fix all the items that needed fixing. Your agent told you to go and look at another home. You listened and looked at other homes and every home you looked has some kind rehab that needed to be repaired before you can move in. This is very common in this in market. Areas like Burnsville, Eagan, Apple Valley, Bloomington to name a few. The market is saturated with bank-owned properties that require repairs. The three main rehab items are the floors, the walls and there are no appliances. There are of course other big buck items such as the furnace, roof, windows and siding to name a few. As a first time homebuyer, you probably don't have a lot of money to invest into your first home. There is a solution. The solution is a FHA 203K streamline loan. With a streamline 203K mortgage, the rehab cost is calculated into the original loan balance, resulting in one loan. The appraiser or home inspector will compile a list of recommended repairs/improvements. The streamline 203K eliminates the need for a consultant and consultant's fees.

Eligible Borrowers:

* Owner occupant-Purchase & refinance
* Non profits
* Investor not allowed
* Maximum mortgage amount is $365,000 including all repair costs

FHA Streamline 203K Highlights

* May be used for purchase or refinance of one-to-four (single family), owner-occupied residences
* For less complex projects that require no plans or specs
* Maximum $35,000 total rehab cost
* Fixed-rate mortgage available
* No minimum loan balance required
* Work must commence within 30 days from closing
* Work must be completed within six months

Ineligible Repairs & Improvements

* Landscaping or yard work
* Major remodeling
* Moving a load-bearing wall
* Room additions
* Fixing structural damage

Eligible Repairs and Improvements

* Roofs, gutters, and downspouts
* HVAC systems (heating, venting, and air condition)
* Plumbing and electrical
* Minor kitchen and bath remodels
* Flooring: carpet, tile, wood, etc.
* Interior and exterior painting
* New windows and doors
* Weather stripping and insulation
* Accessibility improvements for persons with disabilities
* Energy efficient improvements
* Stabilizing or removing lead-based paint
* Decks, patios, porches
* Septic or well sytems
* New kitchen appliances

How is this going to help you? The buyer?

* The buyer can do the updating without using their own money
* The buyer saves time by using professional realtors, mortgage consultant, and contractors

Having trouble paying your mortgage

2010-01-25T19:18:00.000-08:00

You know anyone that is having trouble paying their mortgage payment? Maybe they lost a job or been through a divorce. We can help. There must be three qualifications for a Short-Sale Homeowner. While the misconceptions of what qualifies a seller for a short sale are many, the reality is actually very simple. Following is an explanation of the three major items that most lenders are looking for to see if
you will qualify.

1. FINANCIAL HARDSHIP
First and foremost a lender will want to see that you have a ‘financial hardship’. A financial hardship is a verifiable issue that has or will cause you to miss payments or have financial difficulties. Almost every lender will want to see that you cannot afford to pay your current mortgage. The way that this is demonstrated is on a financial worksheet that your agent will provide. This is essentially a monthly profit and loss statement. While this may sound difficult in reality determining whether you have monthly shortfall or not is actually relatively easy.

2. MONTHLY SHORTFALL
While a short sale is an involved process, this is an excellent place to begin.
Financial hardships can be issues such as:
• Mortgage Payment Adjustment
• Job Loss
• Too Much Debt
• Business Failure
A simple definition for ‘financial hardship’ is:
A material change in-between the day the mortgage was signed and today that has affected your ability to pay.
The Shortfall equation is:
Total Monthly Income – Total Monthly Expense = Monthly Shortfall
The above brokerage assumes no responsibility nor guarantees the accuracy of this information and is not engaged in the practice of law nor gives legal advice. It is strongly recommended that you seek appropriate professional counsel regarding your rights as a homeowner.

In order to qualify for a short sale, you must not have the means to pay down
your mortgage. This means that the mortgage company wants to see that you owe
more than you have in cash (known as being insolvent). You do not however have to be completely broke ― this is a common misconception, the lender will want to see that over time you will not be able to pay your mortgage obligation. Having money in the bank for living expenses is common and will not disqualify you. In order to go through these issues it is recommended that you sit down with your agent and examine each one in detail. While a short sale may seem like a difficult process the right agent can make it a relatively simple one. Take action and make an appointment with us today and get yourself startedon the path to financial recovery. Our team has specialized training on helping homeowners who may be facing foreclosure. Please call us today for a no cost confidential consultation. We can be reached at:
A mortgage modification involves the reduction of one of the following:
the interest rate on the loan, the principal balance of the loan the term
of the loan or all or any of the above. This typically results in a lower
payment to the homeowner and a more affordable mortgage.

3. INSOLVENCY
In order to qualify for a short sale, you must not have the means to pay down
your mortgage. This means that the mortgage company wants to see that you owe more than you have in cash (known as being insolvent). You do not however have to be completely broke ― this is a common misconception, the lender will want to see that over time you will not be able to pay your mortgage obligation. Having money in the bank for living expenses is common and will not disqualify you.

In order to go through these issues it is recommended that you sit down with your
agent and examine each one in detail. While a short sale may seem like a difficult process the right agent can make it a relatively simple one. Take action and make an appointment with us today and get yourself startedon the path to financial recovery. Our team has specialized training on helping homeowners who may be facing
foreclosure. Please call us today for a no cost confidential consultation. We can be reached at 952-994-6988. A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan the term of the loan or all or any of the above. This typically results in a lower payment to the homeowner and a more affordable mortgage.

Phong Cao, Agent Referral Network
10663 165th St W, Burnsville, MN 55337
(952) 994-6988 | phong@mnrealestateteam.com
http://distresshousesales.com/